Recession Hits Costa Rica
Recent headlines suggest rising unemployment.
Remember that pizza guy who zoomed through the pouring rain at 10 p.m. last month to deliver you a fresh steaming hot pizza? He is currently unemployed, along with 129 other Domino’s Pizza employees in Costa Rica. I bet you wished you tipped better now. The job losses don’t end there, and while the government is calling for solidarity and support from the people and private businesses, they are also working on short term law reforms to offer a hand to those in need.
Domino’s Pizza closed nine locales throughout the metropolitan area this week due to the negative financial situation in the region. The finance manager explained that the company registered losses of million, which led to the closings.
These employees were hit by surprise, like many other Costa Rican workers that have been laid off in recent months. The Costa Rican social security administration estimated that 6,000 jobs were lost between July and November of last year. But the firings didn’t stop there nor are they designated to any one industry. Metalco, a steel products producer, just fired 100 people from its Tibas factory. The company also dropped prices 25% for its construction products as the demand just isn’t there. Universidad Latina made cuts in the administrative department firing 20 people.
Tourism saw 22,000 fewer tourists during the second half of 2008 in comparison with the same period in 2007, leading to layoffs in the industry. One industry employee estimated that 30% of tourism workers were fired in La Fortuna in the last quarter of 2008, while other regions are slimming down their work force and reevaluating efficiency levels.
On a more positive note, HP expects to hire 1,000 more people this year bringing its total to 8,000 jobs in Costa Rica. In general, it is expected that 2,500 more jobs will be offered by transnational companies in the service industry during 2009.
As for Intel, which just closed three assembly plants in China laying off hundreds of workers, they will not close the Costa Rican plant that employees 3,200 people. The Corporate Affairs Manager said that the office in Costa Rica, which has been here for 10 years, is a vanguard for the company thanks to the advances in technology that are made here. Since 2006 Intel has laid off 16,000 workers saving billion. Last year the company’s sales dropped 23% from 2007, and they exported 1 million less from Costa Rica.
How to Fix the Problem
President Oscar Arias has noted the problems faced by the Costa Rican people and went about preparing an economic crisis rescue plan called the Shield Law. While not yet passed, Arias announced the formation of the bill last week and what it entails.
Under this same call to solidarity, Arias made specific requests to state banks to lower interest rates and create flexible payment plans for those in need of money. For example, the Banco Popular has a new policy in which it will freeze debts temporarily should a person lose their principal method of income. He also said the government will be investing nearly 3% of the national budget into public works projects, thus offering new forms of employment.
Also on the job front is Arias’s plan to reduce work hours so that more people can be hired. He also suggested that night shifts not be charged as overtime so that more night jobs will open up. Another new concept for the country is the move to telecommuting. As announced last year, the hope is that companies can save money and thus hire more employees if they don’t have to pay regular office expenses like computers, supplies, etc.
All of the issues discussed in the Shield Law would only be enacted for the period of time that the government determines that the country is in a crisis state. Once things get better, most of the policies, especially those unpopular among workers, would go back to how they were before.
Related posts:
(No Ratings Yet)
Loading ...
Leave your response!