Destroying Formal Employment:
"The road to hell is paved with good intentions," is one of those phrases that no one ever knows who said, but they are so accurate that they transcend time. Of course, in economics, the phrase appears more frequently, as governments tend to make populist decisions that, in principle, sound very good, but end up generating negative effects for the population.
TL;DR
- Colombia's labor reform, effective June 2025, is criticized for causing negative effects on the labor market.
- Measures like reduced night work hours and increased pay for Sundays and holidays have led to job losses.
- The Dane reports a decrease of 500,000 occupied individuals between June 2025 and January 2026.
- The hotel and tourism sector has lost over 109,000 jobs.
- The private security sector has seen an 8,000-job reduction.
- 962 gastronomic establishments have closed, eliminating 6,024 jobs.
- Despite job losses, unemployment remains low as dismissed formal workers move into informal work.
- The article argues that the combination of labor reform, minimum wage increases, and tax policies is destroying the productive apparatus.