Panama’s Ministry of Labor and Labor Development reports a net increase of 45,000 new employment contracts so far this year compared to the same period last year. The growth is primarily concentrated in the logistics, hospitality, and general services sectors, offering a complex picture of the nation’s economic recovery. While the government highlights this as a positive indicator, business leaders caution that the quality and permanence of these jobs remain a significant concern for the long-term health of the labor market.
Labor Minister Jackeline Muñoz presented the data this week, acknowledging the nuanced reality behind the numbers. She confirmed that the new contracts do not directly translate to a proportional decrease in the national unemployment rate. The minister emphasized that the figures represent a crucial, though incomplete, step toward broader economic improvement for the country’s citizens.
“Compared to last year we have 45,000 new contracts, which does not mean it transforms 100 percent into a rise or fall in the unemployment figure, but it is an important indicator when seeing how we are taking off as a country,” said Minister Muñoz. [Translated from Spanish]
Minister Muñoz also connected the employment data to Panama’s overall economic growth, which is projected at 4.4 percent. She stressed the challenge of ensuring that this macroeconomic growth translates into tangible benefits for the average Panamanian worker and their family. This process, she noted, is not immediate and requires a coordinated effort across all sectors of the economy.
Business Sector Warns of Temporary Employment Trend
The initial optimism from the government’s report is tempered by analysis from Panama’s private sector. The Panama Chamber of Commerce, Industries and Agriculture has issued a stark warning regarding the nature of the new employment contracts. Its president, Juan Arias, stated that many of the jobs created, especially those aligned with the December holiday season, are temporary or seasonal positions rather than long-term careers.
Arias presented a less favorable outlook on the unemployment situation, contradicting the more cautious optimism from the Ministry of Labor and Labor Development. He cited concrete figures that suggest a worsening trend, pointing to a specific increase in the percentage of people without work. This perspective introduces a critical counterpoint to the government’s announcement of new contracts.
“Unemployment continues growing, that is the reality. Last year we had 9.5 (percent), we think this year we will close near 10 percent, that is a reality,” Arias stated. [Translated from Spanish]
The business leader elaborated on the seasonal nature of the current hiring surge. He explained that while many people find work in December, these are often eventual jobs without long-term security. Arias did, however, encourage job seekers to view temporary positions as potential pathways to permanent employment, suggesting that strong performance could lead to a sustained role.
Informal Economy Poses Major Challenge
Beyond the debate over temporary versus permanent jobs lies a more profound structural issue within Panama’s workforce. Chamber of Commerce reports indicate that a staggering 50 percent of the country’s workers are engaged in the informal economy. This widespread informality means half of all workers lack access to social security benefits, job stability, and legal labor protections.
The high rate of informality complicates the interpretation of official employment statistics. It creates a vast segment of the population that is technically working but remains economically vulnerable. This situation presents a persistent challenge for policymakers aiming to create a robust and inclusive labor market.
Juan Arias ended his comments on a cautiously optimistic note, calling for increased investment as the fundamental solution. He expressed that both the private sector and the government are working to generate confidence. The ultimate goal, he reiterated, is to attract both Panamanian and foreign investment as the only sustainable method for creating stable, high-quality employment opportunities for the nation’s future.