Unemployment rises to 9.6%, its highest level since 2021, and jobs are destroyed for the second consecutive month

Unemployment continues to rise. It is today the main concern of Chileans according to various surveys. And it could not be otherwise. The National Institute of Statistics (INE) reported that the unemployment rate rose one percentage point in the June-August quarter, reaching 9.6%, completing five months above 9% and 44 above 8%. It is also the highest level since the March-May 2021 quarter. "The report shows a deepening of the labor market crisis. This deepening of the deterioration has fundamentally to do with the fact that the economy, starting from the previous month's report, began to show net annual job destruction," says the director of OCEC-UDP, Juan Bravo. According to the INE, this increase is due to the labor force rising 0.3%, while employed persons fell 0.9%. In other words, the economy is not able to absorb the people looking for work. For their part, unemployed persons increased 13.0%, driven by those who were jobless (12.1%) and those looking for work for the first time (23.2%). By sex, the unemployment rate for women stood at 10.3%, and for men, at 9.1%. Meanwhile, by economic sector, the contraction of the employed population was influenced by manufacturing (-7.6%), information and communications (-16.8%) and commerce (-1.1%), while, by occupational category, the decline was observed in formal salaried workers (-2.9%) and unpaid family workers (-4.0%). The informal employment rate reached 26.3%, rising 0.3 pp in twelve months. Informal employed persons increased 0.3%, driven only by women (2.0%) and mainly by domestic service personnel (14.6%). Employed persons reached 9,273,745, which translates into a loss of 81,352 jobs in one year. It is the second consecutive annual decline in employment and the steepest since the February-April 2021 quarter, according to the INE series. Viña del Mar, April 30, 2024. The National Employment Survey (ENE), prepared by the National Institute of Statistics of Chile (INE), indicated that the unemployment rate in the country during the January-March quarter of this year stood at 8.7 percent. Andres Pina/Aton Chile ANDRES PINA/ATON CHILE Juan Bravo points out that "what is pushing employment down is the collapse of formal salaried employment in small and medium-sized enterprises (mipymes). In mipymes, 167,191 formal salaried jobs were destroyed in the last year. This is the largest collapse of formal salaried employment in mipymes since the November 2020-January 2021 quarter and it is the fourteenth consecutive decline of this type of employment in mipymes, as declines have been recorded since May-July 2025." From Horizontal, they highlight that, since November 2025, informal job creation has outpaced formal job creation and that, in February of this year, formal employment began to be destroyed. UnemployedUnemployed persons experienced a jump of 13% in twelve months and are approaching one million people: they totaled 989,400, the highest figure since the August-October 2020 period (1,003,911). The increase was driven by those who were jobless (12.1%) and by those looking for work for the first time (23.2%). The population outside the labor force, meanwhile, grew 1.8%, to 6,424,651 people, influenced by habitual inactive persons (1.6%) and potentially active inactive persons (3.4%). In the Metropolitan Region, the estimated unemployment rate reached 9.8%, higher than the national rate, rising 0.9 pp in twelve months, due to the decrease in the employed population (-1.0%), which was greater than the reduction in the labor force (-0.1%). The male unemployment rate reached 9.1% in June-August, an increase of 1.1 pp in one year, as a result of a 0.5% drop in the labor force, which was smaller than the 1.7% drop recorded among the employed. For its part, the female unemployment rate stood at 10.3%, 1.0 pp more than twelve months earlier, due to a 1.3% rise in the labor force, which was greater than the 0.2% increase among employed women. After these figures were released, the Minister of Labor, Tomás Rau, stated that "from the Ministry of Labor and Social Security, we are doing our part, putting all available instruments at the service of employment and generating the conditions for growth to quickly translate into more hiring, more formal employment and better opportunities for families." In that sense, he added that "the urgency is now, but the task is also long-term. Supporting hiring now and preparing a labor market capable of transforming future growth into more and better jobs." Santiago, March 30, 2023. Unemployment rises again and reaches its highest level since September 2021. The unemployment rate reaches 8.4%, its highest level since September 2021. Marcelo Hernandez/Aton Chile MARCELO HERNANDEZ/ATON CHILE What explains itExperts agree that low economic growth and higher labor costs explain the current situation of the labor market. Cristián Duarte, former director of the National Employment Exchange, states that "beyond the numerical explanation, the main factors are the ones we have been saying for years. Labor costs have increased significantly, in a context of low economic growth and relatively stagnant productivity." He points out that "in the last year the market not only shows difficulties in rehiring those who became jobless but also those looking for work for the first time. All of the above is particularly delicate considering that labor participation fell 0.3%." Pablo Eguiguren, director of Public Policies at LyD, argues that "overcoming this situation requires an economy that grows again and a more flexible labor market. While waiting for that to happen, tools such as those announced by the government this week should be used in order to mitigate, at least in part, the difficulties posed by low growth and high labor costs." Franco Antonucci, researcher at Horizontal, asserts that "there are many things that affect these high levels of unemployment. In particular, the increase in labor costs has grown faster than productivity, which means that, at best, we are producing the same thing, but more expensively." According to the expert, this is influenced by "the 40-hour law, the minimum wage and the pension reform, all laws that go in the direction of improving people's quality of life, but which together raise hiring costs. In addition, automation has accelerated from the pandemic until now, which translates into fewer people needed to perform the same work as in the past, which reduces hiring." Has a peak been reached?The experts' view points to the fact that in terms of the unemployment rate it should not continue rising, but in numbers it is still uncertain. For Duarte, "the evidence indicates that at the end of each year there are seasonal factors that moderate the increase in unemployment, which, together with the measures announced by the government to promote employment, could moderate or compensate for the observed trend." Meanwhile, Alejandro Weber, dean of the Faculty of Economics, Business and Government at Universidad San Sebastián, mentions that "we will see a moderate recovery in employment in the coming months for cyclical reasons. Sectors such as agriculture and tourism will start hiring more people and, therefore, this will be reflected in a lower unemployment rate toward the end of the year." However, he points out that "it is very unlikely that in the coming months we will manage to get below 8% unemployment, which seems to be the structural figure of our economy today, considering the post-pandemic adjustments, the lack of growth and, on the other hand, the excessive labor costs." Bravo adds arguments and states that "in terms of the unemployment rate, it is possible that we have reached this year's peak. In terms of the number of unemployed, it is less clear, since the labor force continues to rise." He points out that "going forward, the labor market should recover very gradually, favored by various factors that converge so that a very gradual improvement of the labor market begins in the coming months." Among them, he mentions the positive seasonality of the national holidays and the summer season, in which several sectors of economic activity have their high season, such as agriculture, commerce, tourism, restaurants, although economic activity had a disappointing performance in August, the economy would begin to grow again toward the fourth quarter of this year, and the effect of short-term measures to accelerate public infrastructure, increase subsidy coverage and inject liquidity into companies. In any case, the improvement would be very gradual. Eguiguren mentions that "seasonality will help ensure that the unemployment figure in the coming months does not continue rising. In addition, the measures of the Executive Branch, those of the short term and the most important ones, such as the implementation of the Reconstruction Law and improvements to the labor market, should prevent reaching those figures. But the fundamental thing is to carry out the necessary reforms to incentivize the creation of more formal jobs. Otherwise, we will continue with figures far above those we were accustomed to before the pandemic." Are you already a subscriber? Log inThis article is exclusive to subscribersSubscribe to read it in full and access all our journalism. View plans