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Europeans fill jobs void in Chile's thriving economy
By Anthony Esposito and Moises Avila
SANTIAGO | Fri Jan 25, 2013
(Reuters) - As the debt crisis raged across the euro zone last year, Madrid-native Laura Tapias and her partner found themselves out of work. With nearly one in four Spaniards unemployed, their prospects looked grim.
After four months of fruitless job-hunting at home, she headed across the Atlantic to Santiago with her boyfriend who had got a job in Chile's capital city.
Two days later she found work as a hydrogeologist at an environmental consulting firm in the Santiago business district dubbed 'Sanhattan' for its resemblance to Manhattan's skyline. She isn't the only foreigner or Spaniard to recently be hired there.
"I dropped off my resume and the next day they said 'yes' at the interview. It happened so fast I couldn't believe it," said the mild-mannered Tapias, 33, adding that she has received a warm welcome in Chile.
Across the street, construction workers are putting the finishing touches to retailer Cencosud's CEN.SN 984-foot (300-meter) Costanera Center. The complex, which boasts South America's tallest skyscraper and largest mall, is testament to the nation's economic vitality.
A buoyant economy, low unemployment and rising wages have been luring foreign professionals to the copper-exporting Andean nation of 16.6 million people, which is in desperate need of skilled workers.
Chile's economic success story, one shared by many of its commodities-rich neighbors, is turning the tables on many years of migration by Latin Americans hoping to make their fortune in former colonial power Spain and other wealthy European nations.
EUROPEAN BRAIN DRAIN
Despite their much larger economies and populations, regional giants Brazil and Mexico received roughly the same number of legal immigrants as Chile between 2003 and 2010, according to a report by the Organization of American States, the Organization for Economic Cooperation and Development (OECD), and the Inter-American Development Bank.
Peruvians, Bolivians, Argentinians, Colombians and other Latin Americans got the lion's share of Chile's work visas last year, though Europeans received them at a faster pace.
With Spain stuck in its second recession since 2009, Spaniards are at the forefront of a wave of Europeans heading to Chile.
Chilean visas for residents of western European nations grew 39 percent through October and surged 84 percent for Spanish nationals, according to government data. Many of them are for skilled professionals like Tapias.
Chile's attraction is an economic growth rate expected to reach up to 5.25 percent in 2013, its fourth straight year of sturdy increase following an expansion in gross domestic product (GDP) of 6 percent in 2011 and 6.1 percent in 2010.
FOUR HUNDRED THOUSAND NEW JOBS
Over the last decade, the number of work visas being granted by Chile has risen by an average 25 percent per year and demand for more foreign professionals has spiked.
That has prompted an overhaul of the country's clunky and outdated immigration legislation, which dates from the early days of the Pinochet dictatorship. The idea is to allow greater agility to recruit skilled workers from abroad.
Forecast mining investments of $100 billion over the next 10 to 12 years alone will require a fresh generation of skilled laborers to fill some 100,000 new direct jobs and another 300,000 indirect jobs, the influential Sonami mining association said this month.
Not having the people, foreign or local, to fill available posts could crimp economic growth and productivity, employment analysts say, pointing to similar woes suffered by regional powerhouse Brazil.
Brazil's government said last year it was exploring ways to ease immigration rules in order to attract up to 10 times more foreign professionals to spur economic growth.
A lack of skilled workers is one of many bottlenecks that brought the world's sixth-largest economy to a near standstill in 2012, a fate Chile hopes to avoid.
"Chile realizes that without the help of immigrants it'll be very difficult to fill the number of jobs required for certain investments and to ultimately boost the economy," Mario Cassanello, the head of Chile's Immigration Office told Reuters.
"We need laws that will give us more flexibility and will reduce bureaucracy," he added.
FULL EMPLOYMENT VS MASS UNEMPLOYMENT
Chile's immigration reform bill aims to cut red tape, create a ministerial committee to define migratory policy, and allow the use of immigration quotas in order to step up the inflow of certain specialties, such as surgeons, when needed.
It would also aim to ease the granting of visas to work in labor-starved regions, such as Chile's mining-intensive north.
The government is also mulling modifying a law that restricts companies with more than 25 employees from having foreigners make up more than 15 percent of their payroll.
"In Chile, the problem isn't that there's an excess of workers. On the contrary, there's a shortage of workers," Finance Minister Felipe Larrain said late last year.
Chile's unemployment fell to a near three-year low of 6.2 percent for the September-November period.
"These levels are close to full employment," Larrain added.
Labor demand has boosted salaries, with wages rising an average 6.5 percent in the 12 months to November.
In contrast, Spain's unemployment rate soared to 26 percent in the fourth quarter, the highest level since measurements began in the 1970s.
"How can you tell it's getting difficult (to hire workers)? Companies are asking for more work permits, so they can recruit people from abroad," said Jonas Prising, president of global staffing services company ManpowerGroup (MAN.N).
"Countries like Australia, Canada, Singapore, Panama in some cases, they understand that they don't have enough of a labor pool. They also understand that if you have enough skilled labor, companies will invest in your country, you can continue to grow," he added.
THE COST OF INEQUALITY
Fuelling the worker void in Chile is an ill-equipped education system which is too costly for many students and has proved incapable of meeting the demands of a growing economy.
Limited access to quality education means income inequality has barely budged in Chile since 1990, making the country the worst ranked in that category among members of the OECD.
Chile spent $6,863 per student in tertiary education in 2010. The OECD average was $13,728.
Fed up with the situation, students have staged massive protests demanding an education overhaul. The protests pummeled the popularity rating of conservative President Sebastian Pinera and helped usher in a tax reform to help pay for increased public education spending.
"It's going to take a decade or so before you see any type of payoff. In the near term, (workers) are going to have to come from somewhere given that there isn't a real wealth of skilled workers in Chile," said Michael Henderson, economist at Capital Economics in London. "People from overseas are going to be the best short-term bet."
ONE-WAY TICKET
It is not just high-skilled jobs that employers are having difficulty filling. About nine percent of farmers polled by industry group National Agricultural Society said they will leave some produce unharvested next season due to a shortage of hands.
"Every year the problem increases," Ronald Bown, head of the ASOEX fruit exporters' association said.
However, the flow of people seeking opportunities in the South American nation -- that has so far defied the odds of a sharp slowdown -- shows no signs of letting up.
Tapias says she had little chance of getting a job in Spain. She laments having fewer vacation days in Chile and misses her family.
"I don't really have enough time to visit Spain. I'm sure my family will come to visit though," said Tapias, who has made Chilean friends but spends most of her time with fellow Spaniards.
Asked when she might head home, she said: "We don't have a return ticket ... we're not sure if we're going back."
(Writing by Anthony Esposito; Editing by Helen Popper and Andrew Hay)
By Anthony Esposito and Moises Avila
SANTIAGO | Fri Jan 25, 2013
(Reuters) - As the debt crisis raged across the euro zone last year, Madrid-native Laura Tapias and her partner found themselves out of work. With nearly one in four Spaniards unemployed, their prospects looked grim.
After four months of fruitless job-hunting at home, she headed across the Atlantic to Santiago with her boyfriend who had got a job in Chile's capital city.
Two days later she found work as a hydrogeologist at an environmental consulting firm in the Santiago business district dubbed 'Sanhattan' for its resemblance to Manhattan's skyline. She isn't the only foreigner or Spaniard to recently be hired there.
"I dropped off my resume and the next day they said 'yes' at the interview. It happened so fast I couldn't believe it," said the mild-mannered Tapias, 33, adding that she has received a warm welcome in Chile.
Across the street, construction workers are putting the finishing touches to retailer Cencosud's CEN.SN 984-foot (300-meter) Costanera Center. The complex, which boasts South America's tallest skyscraper and largest mall, is testament to the nation's economic vitality.
A buoyant economy, low unemployment and rising wages have been luring foreign professionals to the copper-exporting Andean nation of 16.6 million people, which is in desperate need of skilled workers.
Chile's economic success story, one shared by many of its commodities-rich neighbors, is turning the tables on many years of migration by Latin Americans hoping to make their fortune in former colonial power Spain and other wealthy European nations.
EUROPEAN BRAIN DRAIN
Despite their much larger economies and populations, regional giants Brazil and Mexico received roughly the same number of legal immigrants as Chile between 2003 and 2010, according to a report by the Organization of American States, the Organization for Economic Cooperation and Development (OECD), and the Inter-American Development Bank.
Peruvians, Bolivians, Argentinians, Colombians and other Latin Americans got the lion's share of Chile's work visas last year, though Europeans received them at a faster pace.
With Spain stuck in its second recession since 2009, Spaniards are at the forefront of a wave of Europeans heading to Chile.
Chilean visas for residents of western European nations grew 39 percent through October and surged 84 percent for Spanish nationals, according to government data. Many of them are for skilled professionals like Tapias.
Chile's attraction is an economic growth rate expected to reach up to 5.25 percent in 2013, its fourth straight year of sturdy increase following an expansion in gross domestic product (GDP) of 6 percent in 2011 and 6.1 percent in 2010.
FOUR HUNDRED THOUSAND NEW JOBS
Over the last decade, the number of work visas being granted by Chile has risen by an average 25 percent per year and demand for more foreign professionals has spiked.
That has prompted an overhaul of the country's clunky and outdated immigration legislation, which dates from the early days of the Pinochet dictatorship. The idea is to allow greater agility to recruit skilled workers from abroad.
Forecast mining investments of $100 billion over the next 10 to 12 years alone will require a fresh generation of skilled laborers to fill some 100,000 new direct jobs and another 300,000 indirect jobs, the influential Sonami mining association said this month.
Not having the people, foreign or local, to fill available posts could crimp economic growth and productivity, employment analysts say, pointing to similar woes suffered by regional powerhouse Brazil.
Brazil's government said last year it was exploring ways to ease immigration rules in order to attract up to 10 times more foreign professionals to spur economic growth.
A lack of skilled workers is one of many bottlenecks that brought the world's sixth-largest economy to a near standstill in 2012, a fate Chile hopes to avoid.
"Chile realizes that without the help of immigrants it'll be very difficult to fill the number of jobs required for certain investments and to ultimately boost the economy," Mario Cassanello, the head of Chile's Immigration Office told Reuters.
"We need laws that will give us more flexibility and will reduce bureaucracy," he added.
FULL EMPLOYMENT VS MASS UNEMPLOYMENT
Chile's immigration reform bill aims to cut red tape, create a ministerial committee to define migratory policy, and allow the use of immigration quotas in order to step up the inflow of certain specialties, such as surgeons, when needed.
It would also aim to ease the granting of visas to work in labor-starved regions, such as Chile's mining-intensive north.
The government is also mulling modifying a law that restricts companies with more than 25 employees from having foreigners make up more than 15 percent of their payroll.
"In Chile, the problem isn't that there's an excess of workers. On the contrary, there's a shortage of workers," Finance Minister Felipe Larrain said late last year.
Chile's unemployment fell to a near three-year low of 6.2 percent for the September-November period.
"These levels are close to full employment," Larrain added.
Labor demand has boosted salaries, with wages rising an average 6.5 percent in the 12 months to November.
In contrast, Spain's unemployment rate soared to 26 percent in the fourth quarter, the highest level since measurements began in the 1970s.
"How can you tell it's getting difficult (to hire workers)? Companies are asking for more work permits, so they can recruit people from abroad," said Jonas Prising, president of global staffing services company ManpowerGroup (MAN.N).
"Countries like Australia, Canada, Singapore, Panama in some cases, they understand that they don't have enough of a labor pool. They also understand that if you have enough skilled labor, companies will invest in your country, you can continue to grow," he added.
THE COST OF INEQUALITY
Fuelling the worker void in Chile is an ill-equipped education system which is too costly for many students and has proved incapable of meeting the demands of a growing economy.
Limited access to quality education means income inequality has barely budged in Chile since 1990, making the country the worst ranked in that category among members of the OECD.
Chile spent $6,863 per student in tertiary education in 2010. The OECD average was $13,728.
Fed up with the situation, students have staged massive protests demanding an education overhaul. The protests pummeled the popularity rating of conservative President Sebastian Pinera and helped usher in a tax reform to help pay for increased public education spending.
"It's going to take a decade or so before you see any type of payoff. In the near term, (workers) are going to have to come from somewhere given that there isn't a real wealth of skilled workers in Chile," said Michael Henderson, economist at Capital Economics in London. "People from overseas are going to be the best short-term bet."
ONE-WAY TICKET
It is not just high-skilled jobs that employers are having difficulty filling. About nine percent of farmers polled by industry group National Agricultural Society said they will leave some produce unharvested next season due to a shortage of hands.
"Every year the problem increases," Ronald Bown, head of the ASOEX fruit exporters' association said.
However, the flow of people seeking opportunities in the South American nation -- that has so far defied the odds of a sharp slowdown -- shows no signs of letting up.
Tapias says she had little chance of getting a job in Spain. She laments having fewer vacation days in Chile and misses her family.
"I don't really have enough time to visit Spain. I'm sure my family will come to visit though," said Tapias, who has made Chilean friends but spends most of her time with fellow Spaniards.
Asked when she might head home, she said: "We don't have a return ticket ... we're not sure if we're going back."
(Writing by Anthony Esposito; Editing by Helen Popper and Andrew Hay)
