MercoPress. South Atlantic News Agency

Chile's unemployment drops to 8,3%

Chile's national unemployment rate dropped to 8,3% in the March-May quarter, the lowest since the same period in 1998, according to the latest release from the National Statistics Institute.

Similarly in the last twelve months 239.490 new jobs were created, the highest number in twelve years, most of which 63,9% dependent and 24,4% self employed.

A more detailed review shows 50,8% of jobs going to men, 49,2% to women; and by sectors 31,4% of new jobs are categorized as Community and Social Services plus Personal, 24,3% Retailing and 18,1% Construction. Nationally, nine of the thirteen country regions experienced a drop in unemployment, one went unchanged and the rest increased.

Chilean analysts said that the 8,3% rate was lower than expected (8,7%) and can be attributed to a slower growth of the labour force and a greater job creation percentage, particularly since a year ago the job creation rate was among the lowest in several years.

"This means that this coming winter the unemployment rate will be below 9%, which is quite an achievement", said Tomas Flores an expert in labour affairs from the opposition Libertad y Desarrollo think tank.

However, half a million Chileans are still out of a job.

"Although the work force has been expanding, employment is actually growing faster than expected, in twelve months employment increased 4,3%", said Guillermo Patillo from the Economics department from the Santiago University.

Mr. Patillo forecasts that in the coming months of July, August unemployment could reach a maximum 8,7% "but should begin dropping and reach 7% by the end of the year, averaging 8% in 2005".

Furthermore economist Patillo said the new jobs are "better quality and better paid jobs", as the economy recovers, while the self employed are showing a growth rate considerably smaller.

Mr. Patillo also pointed out that a "high minimum salary" has a direct influence on employment for the 18/24 bracket, particularly those from poor homes and less qualified.

He recalled that until December 1997 unemployment for the 20/24 year bracket was 11,6%, but following a "too high adjustment" of the minimum salary, unemployment soared to 24% in 1999 for that age group.

"An increase in labour costs rapidly transferred to the unemployment rate", said economist Patillo.