Employment Indicators and Benefits

Ecuador Table of Contents

Figures for unemployment and underemployment varied and were considered unreliable, but analysts agreed that both problems increased during the 1980s. Unemployment in urban areas was officially estimated at 10.2 percent in 1987, up from about 6 percent in 1975. According to government statistics, underemployment climbed from 25 percent in 1975 to 40 to 50 percent in 1987. Underemployment in rural areas was particularly high and had proven an intractable problem.

The government set minimum wages and increased them frequently to keep abreast of inflation and devaluations of the currency. Minimum wages alone, however, did not accurately represent economic conditions of the average worker because Ecuadorian labor enjoyed an extensive system of mandatory fringe benefits. For example, the average wage earner was entitled to a yearly bonus equal to three months of his or her basic monthly wage and to a monthly cost-of- living and transportation allowance. Paid vacations, overtime pay, and severance pay were all obligatory. These and other supplements could raise a wage earner's average monthly income by as much as 70 percent over his or her basic wage. Workers also benefited from legislation making it difficult to fire employees.

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Source: U.S. Library of Congress