Latin America’s most competitive workforces
Chile continues to the Latin American labor market champion. Photo: Kim Jones/Flickr

Chile continues to the Latin American labor market champion. Photo: Kim Jones/Flickr

19th January 2016

by David Ramirez
Latin Trade Group’s Latin Labor Index 2015 measures Latin America’s most competitive workforces in 18 economies in the region
 
Chile (1sth in the Index) remains the region’s benchmark country in terms of labor owing to a very flexible legal framework and high levels of education of the working force. Chile improved mainly on the back of enhancements in labor-employer relations and an increase in life expectancy, which at 81.7 years continues to be the highest in Latin America.
Aside from Chile, another nine economies saw improvements, with the most progress seen in Argentina (18th), Ecuador (12th), El Salvador (11th), and to a lesser extent, Panama (4th). In general, these and other countries in Latin America improved their labor market following an increase in schooling years, better flexibility to determine wages, more fluent relations between labor and employer, and –bar Ecuador– higher life expectancy rates.
Argentina’s progress was also a consequence of the decline in the minimum wage to value added per worker ratio, from 1.00 in 2014 to 0.63 in 2015, thus implying better competitiveness of the labor force. But it was still well below the levels of Mexico (2nd) and Chile, where the ratio reached 0.14 and 0.23 last year, respectively. The improvement in Ecuador was partly explained by regulatory changes that set limits to the duration of fixed terms contracts. The latter can now be limitless, a feature present in …

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