Peru’s formal employment increases in urban centers

Formal employment has grown by almost 8 percent in Peru’s urban centers from November 2006 to November 2007. According to the Labor Ministry, the retail sector had the highest formal employment growth at 10.4 percent, followed by the industrial and service sectors with growth at 8.4 and 7.8 percent respectively.

Retail growth was reportedly due to an increase in business during the holiday season while employment growth in the service sector is attributed to teaching.

In Peru’s capital, Lima, industrial employment growth was due to an increase in textile business and manufacturing of tools and machines, including electro-mechanical instruments. In other urban centers, the industrial employment growth reportedly came from food and beverage companies.

The city of Chincha, located in the earthquake-devastated Ica Department, had the highest formal employment growth at 19 percent followed by Tacna, the capital of the southern Tacna Department, at 18.4 percent. In Lima, formal employment grew by 8.4 percent.

In some cities, however, opportunities in the formal economy decreased. For example, in the northern-coastal city of Chimbote, in Ancash Department, formal employment decreased by almost 2 percent.

While formal employment has reportedly increased, many Peruvians are still working in the informal economy, outside the purview of the government and without labor benefits.

A 2002 report by the National Institute for Statistics and Informatics, INEI, reported the scope of Peru’s informal economy. INEI reported that 4.3 million urban jobs, or 61.5 percent, were in the informal sector. About 1.8 million people in Lima, or 53.1 percent of the city’s possible labor force, had informal jobs

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