Labor growth in Metropolitan Lima: opportunities and challenges for all

The labor market in Metropolitan Lima has shown signs of growth in recent months, with an increase of over 250,000 new jobs compared to last year, reaching a total of 5.47 million workers. However, this increase has been accompanied by a noticeable disparity in income, which has yet to recover to pre-pandemic levels. The situation raises important questions about the future of employment and the quality of life for residents of Lima. When observing segmentation by age, the group of 45 years and older has maintained a significant growth of 9.6%, indicating a preference among companies for more experienced workers. In contrast, the employment rate among young people aged 14 to 24 has fallen by 3.3%, highlighting the difficulties this segment of the population faces in entering the labor market. This situation has become a cause for concern for the International Labor Organization (ILO), which has expressed its worry over the lack of opportunities for young people. The data also reveals that commerce and construction are the sectors that have contributed most to job creation, with increases of 9.6% and 9.4% respectively. Other sectors, such as manufacturing and services, have also shown healthy growth, above 3%. However, despite this expansion, the group of underemployed workers has grown by 4.2%, suggesting that many people remain in low-quality jobs, with over 2.2 million workers in this situation. Paola Herrera, a senior analyst at the Peruvian Institute of Economy (IPE), has highlighted that the growth of adequate employment, which offers better conditions and remuneration, has been driven by the dynamism of the services and consumption sectors. This progress, according to Herrera, is an indication of recovery, although it is still premature to think that the crisis caused by the pandemic has been overcome. Juan Carlos Odar, director of Phase Consultores, warned that, although the recovery of employment is a reality, it has not been homogeneous. Men, for example, have seen a faster improvement in their income compared to women, reflecting persistent inequalities in the labor market. Additionally, age analysis shows that older workers are benefiting from this recovery, which could be affecting job opportunities for younger individuals. As of July this year, the average monthly income in Metropolitan Lima stood at S/1,998.1, representing an increase of 3.2% compared to the same period in 2023. Despite this growth, real incomes, adjusted for inflation, are still 5.4% below pre-pandemic levels. This fact poses a significant challenge for workers, who struggle to maintain their purchasing power in a context of rising inflation and living costs. Herrera emphasizes that the recovery of labor income is closely related to the overall recovery of the economy, which in turn depends on private investment. This virtuous circle could be key to strengthening adequate employment and, eventually, improving income levels. The connection between productivity and remuneration is fundamental to establishing a more just and equitable labor market. In this context, Odar underscores the importance of sustained growth in Gross Domestic Product (GDP), which is linked to greater productivity and, consequently, better remuneration. As companies manage to optimize their operations and processes, it is expected that this will be reflected in the availability of quality jobs and an increase in workers' incomes. Despite the challenges that still persist, the outlook for the labor market in Metropolitan Lima is encouraging. The adaptability of economic sectors and the gradual recovery of the economy could lay the groundwork for a more favorable environment for workers. However, an integrated approach that promotes equity and inclusion is needed to ensure that all population groups benefit from this growth and that the recovery is sustained and accessible to all. Upcoming labor and economic policies will be crucial in defining the course of employment in the Peruvian capital and ensuring a recovery that leaves no one behind.