Ecuador’s Average Monthly Labor Income Declines as Gender Wage Gap Persists

Ecuador’s Average Monthly Labor Income Declines as Gender Wage Gap Persists

In August 2023, the average labor income for employed Ecuadorians was USD 434, reflecting a decrease of USD 18 over the previous 12 months, as per the National Institute of Statistics and Censuses (Inec).

A more significant drop was observed in the average labor income for men, which fell by USD 36 to USD 458. This dip can be primarily attributed to a reduction in working hours from an average of 38 hours per week in August 2022 to 37 hours in August 2023.

Contrarily, the income for women experienced an increase of USD 4.3 between August 2022 and August 2023. Despite this slight improvement, a gender wage gap persists, with women earning an average labor income of USD 393 per month, 17% less than men.

Employment Trends and Labor Indicators

The main labor indicators of Ecuador showed negligible variation in August 2023 compared to the same month in the previous year. The percentage of Ecuadorians with proper jobs, those earning at least the basic wage and working eight hours a day, constituted 35% of the employed population. The unemployment rate was recorded at 3.5%, while the underemployment rate, referring to precarious work where less than the basic salary is earned, stood at 21.2%.

Unemployment among the urban population saw a decrease from 5.4% in August 2022 to 4.2% in August 2023. Furthermore, by August 2023, 54.6% of people with employment were part of the informal sector of the economy, typically characterized by precarious conditions, absence of social security, and labor income below the basic wage.

Gender Disparity in Employment

Despite some improvements, gender disparity continues to be a significant concern in the Ecuadorian labor market. As of March 2023, women earned an average of USD 402.8, less than the Unified Basic Salary (SBU) of USD 450. In contrast, men reported higher average earnings of USD 470.3. This discrepancy in income is further amplified by the difference in work hours, with men reporting an average of 36 hours worked per week, compared to 30 hours for women.

The rate of women without work was 4.3% in March 2023, higher than that of men at 3.2%. Moreover, the rate of men with adequate employment was 39.5% in March 2023, significantly higher than that of women at 27.5%. These figures underscore the persistent gender inequality in the labor market.

Progress and Challenges in the Labor Market

Ecuador’s labor market has shown signs of progress, with a decrease in unemployment and underemployment rates, and a marginal increase in adequate employment. However, challenges persist, particularly in the form of gender disparities in income and employment opportunities, and the prevalence of informal employment.

Addressing these issues would require comprehensive labor market reforms, gender-sensitive policies, and measures to promote formal employment. The evolution of Ecuador’s labor market will undoubtedly have significant implications for the country’s social and economic development.