Young people have few job opportunities because they lack the necessary skills, indicates the State of the Nation 2018 report

Currently, few Costa Ricans, but especially young people between the ages of 17 and 24, have the skills needed by companies that offer jobs more easily.

Today this population suffers unemployment of 39%; that is, four times more than the national average.

It is necessary to know how to better execute the 8% of the Gross Domestic Product that every year is destined for education, so that it is concentrated especially in broader programs of learning English, as well as skills typical of engineering, technology and customer service. client especially with regard to tourism.

If Costa Rica were to facilitate these skills to students in public schools, they would improve the country’s economic growth and productivity.

Areas related to tourism, medical devices or shared service centers are three of the most important that today could collect much of the mass that does not have work, if all had the necessary skills.

Several of these information was evaluated within the 2018 State of the Nation Report, presented last week.

How to solve the problem?

The first thing would be the implementation of dual education, especially in technical colleges.

With this, the students would receive a professional and educational training, which is managed with teachings in theory and practice in two different places.

First in the educational institution and then in a company or organization where they carry out the didactic activities they learned in school.

Last week it was announced that the Dual Education bill has already passed to the plenary.

With this, high school students over 15 years of age could occupy up to 10% of the places in a company.

The second point is to rethink the curriculum that is taught in public schools, in order to strengthen the teaching of a second language and other skills.

51% of income inequality is explained by educational gaps

Unemployed youth and unskilled people do not have access to the highest paying jobs, nor to those companies that have better opportunities to open new jobs.

The reasons have already been stated, the lack of skills in the command of a second language (English and Portuguese the most required), soft skills, especially those related to technology or engineering, mean that these positions continue to be filled.

Likewise, sectors with chains to free zone companies – today drivers of the economy – are also a multiplier of employment, but there is little development of these ecosystems around activities such as high-tech manufacturing.

Between 1990 and 2017, 51% of income inequality among employed persons was explained by the existing wage differences, the remaining 49% is divided by sex, age, geographical location, among others, indicated the State of the Nation.

Inequality decreases when there is a sustained increase in GDP growth and productivity for at least four years.

A public policy that stimulates productivity is necessary since it is favorable for the human development of the country, improvements in education are the main factor to consider.

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Growth engine slowdown with historical job losses

The report points out that the Costa Rican economy is characterized by low production chains and with this few employment multipliers, which makes it difficult to create new jobs.

Household consumption, foreign direct investment and exports, which are the main engines of the country’s economic growth, have experienced a cooling down since 2017, with this one of the largest periods of job loss in the last 20 years (30 thousand), which hurts the least qualified.

The economic slowdown continues in 2018, but the opportunities that the country generates within its educational systems is not a true tool to get a job without being sufficiently qualified; For this reason, young people are the most excluded group in job opportunities.

The areas where the most jobs were lost were commerce, agriculture and manufacturing.

Fall in economic activity

Taking the monthly index of economic activity shows a significant slowdown, which could further contract current jobs.

Low unemployment but for obvious reasons

The decrease in employment occurred at the same time that the economically active population (employed and unemployed) was reduced. For this reason, the unemployment rate, 9.3% in 2017, was almost unchanged from the previous year (9.5%).

Generational change in employment

When comparing the evolution of generational change, it is clear that since last year there has been a significant decrease in jobs.

Real income of the employed

Skilled workers have a better income than those who are not prepared; For this reason, changing the curriculum of education would help many people to be more productive and even obtain better jobs, which precisely today have vacancies.

What to do to improve economic growth and employment?

These are ideas of several analysts taken from their comments on a note published in THE REPUBLIC on October 25 last.

Everything passes through the confidence of investors

The economic reactivation goes through the confidence of the economic actors: investors, consumers, producers, and importers. And this yes or yes, happens through the stability of the economy today.

In other circumstances, one would speak of improvements in public works, improvements in procedures, credit, etc.

Today the reactivation of the economy tuition involves solving the fiscal issue through the reform, which, although it is not a measure to anyone’s liking, the truth is that it gives greater tranquility and legal security.

Currently the issue is so uncertain that economic agents are postponing their investment plans, consumption, production, contracting, and so on.

Real access to work and education is elementary

In economic terms in Costa Rica, according to data from the Continuous Employment Survey for the Second Quarter of 2018, the labor participation rate for women is 46.8% and for men 74.9% and the unemployment rate is for women it is 12% compared to 6.6% for men.

Once women enter the labor market, the gaps persist. Women face higher rates of underemployment and informal work and lower average wages than men, so we are convinced of the need to provide tools to women so that they have real access to work and education and thus be able to reverse the figures of poverty.

The most important thing is not to hinder private development

The most important thing is that the State does not hinder the development of the private sector, simplifying and streamlining procedures, as well as the efficiency of public management, construction of infrastructure based on the figure of concessions, reduction of the State and the establishment of public employment laws and single pension scheme.

Reducing state spending and not burdening companies with taxes that are then used to spend and not invest.

Education and health are essential for well-being

In the context in which we are, the first thing is that the possibilities of future growth depend on guaranteeing the stability of the economy and this requires, on the one hand, increasing government revenues – hence the importance of the proposed reform, although not be sufficient— and, on the other hand, at least reduce the rate of growth of spending, to generate confidence.

We need a very delicate balance between stabilizing measures – higher income and lower spending growth – because without stability there is no growth, but without falling into extreme austerity schemes that restrict aggregate demand and cut important public spending and investments for the people and for the economy.

Education and health are essential for well-being, and we have already learned the great cost of cutting back on those investments.

We can say the same about security, which not only affects the well-being of people but also the country’s tourist attraction.

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