San José, Costa Rica, since 1956

Labor Shortage Nears ‘Crisis’

Costa Rica’s labor shortage is reaching what some are calling “crisis” levels that could damage the country’s agricultural production and cause the recent construction boom to grind to a halt.

Not enough Costa Ricans want to work manual labor jobs, say government officials and private sector representatives.

Meanwhile, an immigration law passed in 2006 made it harder and more expensive for Costa Rican employers to hire immigrant workers desperate for jobs.

A reform of that law is creeping its way through the National Assembly. But in the meantime, buildings have to be built and coffee, bananas, sugarcane and cantaloupe have to be harvested.

No one’s quite sure who is going to do it. “We’re very close to a crisis that could affect production,” said Labor Minister Francisco Morales.

The shortage is most serious in the agricultural and construction sectors. Morales said the ministry estimates there are nearly 70,000 jobs to fill just in the agricultural sector, including 5,000 in sugarcane, 5,000 in banana, 4,000 in pineapple and 45,000 for this season’s coffee harvest.

Gabriela Sandí, executive director of the Chamber of Agriculture and Agro-Industry, gave an even more dire analysis, estimating the shortage at 80,000 workers.

Morales said this is the first time the Costa Rican agriculture industry has confronted such a looming crisis, though there have been seasonal shortages for years.

“When the economy of Costa Rica went from being an agricultural economy in 1980 to being, today, a knowledge and service economy… Costa Ricans went flooding to that economy and left agriculture behind,” Morales said.

Meanwhile, Morales said, Nicaraguan immigrants have picked up the slack.

In 2006, the agriculture industry employed an estimated 247,000 workers, including 67,000 foreigners – mostly Nicaraguans – to bring in the harvest.

Approximately 28,500 migrant workers enter Costa Rica legally every year to work in the farming industry.

Agricultural products were Costa Rica’s second largest export in 2006, accounting for $1.7 billion and more than 20% of all exports, according to numbers from the Foreign Trade Promotion Office (PROCOMER). But in August of last year, an immigration law passed toward the end of the Pacheco administration (2002-2006) went into effect. Among its provisions, the law requires all work permit paperwork to be taken care of in foreigners’ home countries.

That means that Costa Rican employers looking to make foreign hires have to physically travel abroad to do the recruiting, adding expense and hassle.

“The law has significantly complicated bringing labor here,” Sandí said.

Sandí added agricultural producers are working together with Immigration and the Labor Ministry in a special commission to come up with a plan. For now, that plan includes getting the reform law passed through the assembly.

Specific sectors are taking action as well. For example, coffee producers – which will employ some 150,000 workers for the harvest this year, 40% of those foreigners – are looking into mechanizing a portion of the harvest, said National Coffee Institute (ICAFE) executive director Ronald Peters.

ICAFE is also offering a toll-free number that potential coffee harvesters can call to find out where they might be needed. In addition, Peters said, the Institute will be courting students who might want to make a few extra colones during their Christmas vacations.

The immigration restrictions have worked in conjunction with the construction boom of recent years to pinch the agricultural industry from two sides.

Construction increased by a record 62% last year, and this year is expected to grow by as much as 79%, said Construction Chamber Executive Director Randall Murillo.

Immigration, however, has remained static.

The combination of more jobs with fewer people to do them means that the larger construction projects are paying workers higher wages to attract the shrinking labor pool.Murillo said this has had the effect of stealing workers away from both small construction projects and the agriculture industry.

“I’m not saying agriculture isn’t paying well,” Murillo said. “It’s just that construction is paying really well because of the big projects.”

Like the agriculture industry, Costa Rican construction also depends on foreign labor. Of the 130,000 people working in that industry, Murillo estimates 50-60% are immigrants. While immigration law reform would be helpful, “We all know how long that could take,”Murillo said.

As a short-term solution to the labor crunch, Murillo and others in the private sector are pushing for the Costa Rican government to sign agreements with countries such as Ecuador, Cuba and Mexico that would allow Costa Rican employers to bring cheap labor in from abroad.

Failing any solution in the near future, the lack of labor could very well cool the construction boom.

Developers “will have to postpone their projects for later,”Murillo said. “And not all investors are interested in waiting.”


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