In real terms, the average salary that Ecuadorians receive in 2022 is 1.9% less than in 2019, before the health emergency.
Despite the economic recovery and the increase in the basic salary in Ecuador, the population still receives an average remuneration lower than that of levels prior to the Covid-19 pandemic.
The World Wage Report 2022-2023, from the International Labor Organization (ILO), reaches this conclusion.
In real terms, the salaries that Ecuadorians receive in 2022 are 2% lower than in 2019, before the health emergency.
This after a sharp drop in wages of 15% in 2020 and 9% in 2021, says the study.
In Latin America, the salary has decreased 1.7% during 2022.
Salary and employment
The ILO explains that the average salary of Ecuadorians cannot recover due to a series of factors, among which the stagnation of the generation of adequate employment stands out.
For this reason, the majority of people of working age in the country, 62%, have inadequate employment, according to the National Institute of Statistics and Censuses (INEC).
In contrast, only 33.7% register adequate employment, which is far from the levels prior to the Covid-19 pandemic.
In 2019, almost 40% of the Economically Active Population (PEA) had a full job.
This means that almost four out of every 10 people of working age had a job where they spent the legal working day of 40 hours a week; and for which they received the basic salary.
The stagnation of adequate or full employment occurs despite the growth of domestic sales and Ecuadorian exports.
Why? Due to the deterioration of the business climate in the country and the rise in the basic salary, which makes the productive sector assume higher costs in the midst of the crisis, explains an analysis by the Development Studies Corporation (Cordes).
Lower purchasing power
And the situation of Ecuadorian households is complicated because, in addition to having a contraction in their income, they must face the erosion of their purchasing power, due to the rise in prices, says the OIT.
Inflation reached 3.64% in November 2022, in year-on-year terms.
People from the middle and low socioeconomic strata are the ones who feel the impact of inflation the most, says the ILO. This is due to the fact that these groups of the population allocate a large part of their income to essential goods and services, which register the highest price increases.
For example, food registered inflation of 7.32%, becoming the basic food basket category with the highest price increase in November.
In this context, the lack of employment and inflation have positioned themselves as two of the main concerns of Ecuadorians in 2022, maintains the market analysis firm Kantar.