Have you ever wondered what the consequences of unemployment are? Before you jump the gun, try not to think only of the economic ones but consider societal and health ones as well. Unemployment is detrimental to mental health. The feeling of accomplishment, contribution to society and to one’s family well-being deteriorates once one stays unemployed for an extended period of time, according to a study conducted by the University of Massachusetts. COVID-19 pandemic forced us all to stay home and for many people around the globe that practically meant dealing with unemployment on top.
Unemployment… Where does it stand in Latin America?
Taking a look at the unemployment rate by continent it is evident that the pandemic affected all countries, even the most advanced ones. According to the Bureau of Labor Statistics, the U.S unemployment rate was 3,8% before the COVID-19 pandemic, in February 2020. By May 2020, it skyrocketed as high as 16%. While in Latin America, the governments battle the ongoing health crisis, a crippled labor market awaits. As of September 2020, 30.1 million people were out of work, according to the International Labor Organization’s report, Panorama Laboral 2020: América Latina y el Caribe. That may only mark a 1.9 percent increase when compared to the first three quarters of 2019, but only looking at the unemployment rate obscures a larger problem: a 5.4 percent shrinking of the labor force. The latter being the most worrying trend, according to the UN agency, given that Latin America has long suffered from low productivity. Worth noticing here that the pandemic has also led to a decrease in informal workers due to restriction of circulation and curfew hours. Argentina for example witnessed the strongest drop (-10.7%) in informality in the second quarter of 2020, followed by Peru (-8.1%).
Let’s paint a picture with the aforementioned numbers. 23 million Latin Americans stopped trying to gain employment in the first three quarters of 2020, which practically means that the labor force amounts to only 57.2 percent of the region’s working-age population deemed to be employed or actively looking for work. At the same time, taking a closer look at the unemployment rates of Latin American countries, the data speaks louder than words, painting a rather alarming reality. Let’s throw some more numbers into the mix. Data released from WorldBank.org, suggest that Latin America’s unemployment rate for 2019 was 7,99%, marking an increase of 0,03% from 2018. For 2020 though, the unemployment rate recorded a jump to 10,28% compared to last year and with 2021 almost to an end the region marks an increase to 11,2%. When reading these numbers, it only makes you wonder how the situation in terms of average wage fluctuates for the continent of Latin America and how the basic food basket (BFB) increased during last year. According to salaryexplorer.com the minimum monthly wage in Colombia is about 908,526 COP, which roughly amounts to 250 EUR. In Peru, the minimum monthly salary is 930 PE, roughly 200 EUR. A person working in Argentina, earns the minimum 32,000 ARS monthly, which translates to roughly 280 EUR.
In Chile the minimum monthly wage is at around 337,000 CLP, which roughly amounts to 400 EUR and in Mexico the minimum monthly salary is around 4,500 MXN, which translates to roughly 190 EUR per month. What is really troubling though is the basic food basket value in those countries. In Peru for example, the Basic Food Basket value has doubled ever since the pandemic hit us all, requiring 700 PEN (150 EUR) in order for a Peruvian to cover basic food needs. Similarly in Mexico, the Basic Food Basket value increased by 5% compared to last year when it used to amount up to 1800 MXN.
Driving… towards a brighter future
It is said that one moment can transform one’s life and that happiness is nothing more than the sum of those moments that make our hearts skip a beat. At Beat, we are all about those moments and we asked some of the people choosing to drive with us, how they got acquainted with Beat and most importantly how their lives changed for the better from the moment they decided to start driving with the fastest growing ride-hailing app in Latin America. More than 700,000 drivers choose Beat as their daily ally in order to increase their income, so that they can offer a better life to their loved ones and cover basic everyday needs. Having in mind the situation in Latin America especially in terms of unemployment resulting from the unprecedented times we all had to deal with, Beat offers the much needed flexibility for people to take action and their future into their own hands. In Chile for example, the average income earned per driver monthly for the last 12 months amounts roughly at around 300 euros (270,000 CLP), which is 5 times more than the Basic Food Basket value for the capital of the country, Santiago. In Peru, the average monthly income generated per driver since the beginning of COVID-19 amounts at around 170 euros (780 PEN) which translates into the month’s Basic Food Basket Value. Similar situation in Mexico with the average monthly earnings of drivers for the last 12 months reaching double the value of the country’s basic food basket, amounting to 170 euros (3820MXN). In Argentina, within the last year the Basic Food Basket value has increased almost by 50% skyrocketing to 30,000 ARS. With such a drastic increase, the average monthly income generated by a driver using Beat over the last 12 months, has a significant value, reaching 150 euros (17,000 ARS). Last but not least in Colombia, the country with the cheapest basic food basket value in Latin America, a driver earns on average monthly at around 100 euros (430,000 COP) which roughly translates to 5 times more that the basic food basket value which amounts at around 20 euros. Since March 2020 the pandemic has drastically changed our lives, with drivers finding in Beat a way to secure not only a steady income but a way to stay productive and offer back to the community. For the last 19 months, the amount that a Colombian driver was able to secure was almost 2000 euros on average, the Chilean one at around 6000 euros, the Peruvian and Mexican driver generated almost 4000 euros on average and an Argentinian close to 2000 euros.
Imagine that! The impact of Beat to so many lives is getting closer and closer to the picture of a world in motion, a world where people can reach any destination conveniently, safely and quickly, while providing enormous economic opportunities to thousands of people who wish to earn income as drivers. We keep investing in understanding local culture and local drivers’ and riders’ needs like no other, maintaining a hyperlocal approach in all business functions, from product, to operations, to marketing. We shoot for the stars and we make the most of your time on the road!
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