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FIAP > Boletín – Recientes > Pension Note No. 38 – Structural changes in the labor market – October 2019

Pension Note No. 38 – Structural changes in the labor market – October 2019

16 October, 2019
  • There are two major trends affecting labor markets. First, the ongoing technological progress over the past two decades. Second, population aging, which translates into greater longevity, will have a direct impact on the dynamics of labor markets.
  • The convergence of aging and new technologies will have a marked impact on the composition of the labor market. The professionals with the fifth highest demand in the future will be software application developers, which is obviously due to technological progress. The other occupations that will experience an explosive increase in demand are those related to the population aging trend: personal care assistants (more than 777 thousand new jobs), food preparation and service workers, nurses and housekeepers.
  • One of the consequences of technological progress is the creation of jobs via digital platforms, or the gig economy. Incorporated by companies such as Uber or Airbnb, this business environment operates by creating markets based on ratings and payment systems through applications. According to figures provided by the Minister of Labor, approximately 150 thousand workers (1.7% of total employment) are currently employed in this segment of the economy.
  • Apart from the advantages generated by digital platforms, they also pose challenges. The platform acts as a tax and contributions collector. Public policy makers should therefore bear in mind that it will be necessary to regulate the platforms to perform that role. The platforms, in turn, will have to accept this responsibility.
  • The time is ripe for considering how new digital platforms can help the pensions sector provide better services to the workers involved. Ideally, digital platform workers should be able to allocate a percentage of the income derived from their work to an individually funded pension account or a traditional savings account.

To download this Note, click on this link.

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