The Center for the Study of the New Economy (CENE) of the University of Belgrano warned in its latest report that the real unemployment rate would have reached 18.7% in the second quarter of this year, the highest level since 2002. In that year it reached its historical maximum with 19.7%.
The data from the University of Belgrano exceeds by 5.6 percentage points the 13.1% recorded by the Permanent Survey of Homes of the Indec in the same period and is due to the fact that the survey of the Indec, by sticking to the historical methodology, did not contemplate the individuals impeded by the pandemic and the quarantine from actively seeking a job.
Note that the number of unemployment results from dividing the number of people who did not have a job during the reference week and were actively looking for a job, by the number of people in the economically active population (EAP), i.e., people between the ages of 15 and 64 who are working or looking for work.
It is common for unemployment to be underestimated by official statistics because of the "discouragement" effect, i.e. people not looking for work just in the reference week already tired of looking and not finding it, but this effect is relatively stable.
This time, however, the Indec recorded "an abrupt jump in the category of inactive people available to work - people who lost their jobs and would not have been able to go out and find a new one - whose total would represent 1.3 million people. If they are added to the 2.2 million that the Indec counted as unemployed, it gives a total of 3.5 million unemployed," the CENE report detailed.
"The drop in the percentage of the working population is striking. In effect, the activity rate falls from 47.1 to 38.4%, the minimum value of the historical series analyzed. The drop in the activity rate indicates that there is an increase in the population that is neither employed nor unemployed. Who are they? The unemployed who, at the time of the survey, although they do not have an occupation, were not actively seeking work either. It is not surprising that this category has had a sharp increase. How could they be looking for work if, due to the effect of the shut down, they could not leave their homes," said Victor Beker, economist and director of the CENE.
"In reality, they are unemployed, deprived of looking for work. And this is only a minimal estimate. It is very likely that the Indec has not been able to identify the total number of people who are forced to be inactive due to the effect of the quarantine, even due to the conditions of the telephone survey, which implies a substantial change in the modality of the face-to-face interview. For this reason, the agency itself warns that 'the estimates are not strictly comparable with those of previous quarters,'" the economist and researcher warned.
Therefore, for the economist: "There are reasons to suppose that this number underestimates the real magnitude of the phenomenon".
In fact, data from the Survey of Labor Indicators of the Ministry of Labor recorded that at the end of the second quarter, the rate of employee departures equaled or exceeded that of entries, which shows that the process of job losses in the private sector was not reversed.
"A complementary and equally worrying fact is the amount of population that stopped receiving any kind of income, compared to the second quarter of 2019. Some 2.5 million people who had some income last year had none, neither working nor non-working as the IFE or other forms of state subsidy," concluded Beker.