Some members of Costa Rica’s business sector alarmed over ‘historic’ jump in unemployment

January 27, 2015

A group of Costa Rican business leaders are calling for an emergency declaration regarding “historic” jumps in unemployment during the last several quarters.

The Union of Private-Sector Chambers and Associations (UCCAEP), an organization that represents 50 businesses and major sectors of the economy, noted that a recent wave of layoffs across several sectors of the economy — from Wendy’s to Avianca — has culminated in more than 228,000 unemployed Costa Ricans at the end of the third quarter of 2014, according to figures from the National Statistics and Census Institute (INEC).

“It’s normal to see business come and go ever since Costa Rica decided to compete on the international market 30 years ago. What’s not normal is losing 26,000 jobs in one quarter,” said UCCAEP President Ronald Jiménez.

The year 2014 was a difficult one for job creation in Costa Rica. Between the second and third quarters of 2014 alone, nearly 26,000 people lost their jobs. The exit of large companies like Intel and Bank of America in April started a long slide of companies either leaving Costa Rica or reducing their workforce here. According to UCCAEP’s latest business confidence survey in November 2014, 28 percent said they let go employees and over 60 percent of businesses said that they did not plan to hire any new employees in 2015.

Restaurants have been especially hard hit so far this year, with Bagelmen’s as the most recent closure. Jiménez said that more layoffs in the restaurant sector are expected in the coming weeks, but the UCCAEP president would not specify specific companies.

Jiménez said that the new jobs announced by the government in recent months have done little to dent the widening employment gap. The UCCAEP president said that business chambers were concerned about the loss of employment for unskilled labor in Costa Rica, noting that most foreign companies that invest in Costa Rica are looking for skilled, bilingual workers.

UCCAEP renewed its call for the government to address the deficit, improve infrastructure and reduce the cost of electricity to help shore up confidence in the country’s macroeconomic performance. Jiménez criticized President Luis Guillermo Solís’ recent trips to Brazil, China and Bolivia. “It appears that the president is not focused on national issues,” Jiménez said.

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