Panama was once one of the most advanced manufacturing centers in Latin America, and its factories employed 1.5 million people.
The country’s economy, however, has been steadily shrinking for decades as its population has been decimated by disease and environmental degradation.
The result is a workforce that is nearly 50% lower than it was a quarter century ago.
A study published this week by the International Labour Organization (ILO) found that the Panama economy has been contracting by more than 2.6 million jobs in just the past 10 years.
Workers in Panama face many challenges in getting paid, having their jobs protected, and working with employers who are unable to pay their bills.
This week, Panama’s National Bank published an analysis of data collected by the country’s Chamber of Deputies in 2018.
In 2018, the Bank found that Panama had an employment rate of 57.7%, but by 2022 it had fallen to 55.2%.
The job loss in 2022 was a significant one, but the Bank didn’t attribute the drop entirely to the canal.
According to the report, the job loss occurred partly due to a drop in the number of Panama workers who left the country.
According, the number dropped from 7,857 in 2018 to 7,622 in 2022.
The Bank also pointed out that the number in 2022 had risen from 5,721 to 6,906.
The decline was not just a result of a drop-off in the country from the industrial sector, the study found.
“In 2018, about 10% of the workers were in manufacturing, and by 2022, the share of the labor force in manufacturing had risen to 15.4%,” the Bank wrote.
“The number of manufacturing workers in 2018 had dropped by more of 10,000 compared to 2022, and in 2022, it had increased by about 11,000.”
The job losses in the factories that employ the workers at the Panamanian factory that was closed in 2017 were particularly severe.
According the report: “Between 2020 and 2022, there were only 6,600 factories employing more than 1,000 people, a decrease of nearly 10% from the previous year.”
The loss of manufacturing jobs has been particularly painful for the countrys most vulnerable workers, the report found.
Workers with disabilities, who have long been excluded from the Panama labor force due to their disability, have been particularly affected by the loss of their jobs.
“Many of the disabled workers in Panama were forced to work in factories that employed less than 1% of their ability,” the report said.
“This is a real hardship for them and their families.”
The unemployment rate in Panama in 2018 was 12.2%, but it was only 7.4 percent in 2022 and was well below the national average of 12.8%.
The report also found that nearly 50,000 workers in the manufacturing sector lost their jobs between 2020 and 2019.
“More than half of the workforce in the factory sector lost jobs between 2019 and 2022,” the study said.
The loss in factory jobs also impacted the countryís economic growth, the bank noted.
In 2021, the gross domestic product per capita in Panama increased by 4.6% and the gross national product per person grew by 3.4%, but the country lost more than 20,000 manufacturing jobs between 2018 and 2019, the banking report noted.
“While the number and size of factory closures were significant, the impact of factory closings on the economy and growth was less than that experienced in other countries,” the bank said.
This was particularly true of the manufacturing industry.
In 2017, Panama had the fourth highest rate of factory layoffs in Latin American, behind Colombia, Honduras, and El Salvador.
According it, the industrial workers who lost their manufacturing jobs were disproportionately concentrated in the cities of Caracas and Port-au-Prince.
The banks report noted that the manufacturing industries in Panama have become highly vulnerable due to the lack of investment and productivity in recent years.
According with the report by the Bank, the loss in factories and jobs created “a significant impact on the productivity and productivity growth of the economy.”
The economic impact of the Panama canal was not lost on the people of Panama.
In fact, workers and local leaders are working to build a new manufacturing base to replace the factories, according to the government.
“We need a new, more advanced manufacturing base that will support a new industry and new technologies, while providing for local needs and maintaining a level playing field in the global market,” Prime Minister Edna Pérez said in a statement.
“Panama will play a critical role in the new economy of the future, helping to provide for the development of the local sector and to improve the quality of life for the citizens and their family,” Péz added.
The report is the latest to come out of Panama, which has a population of about 4.5 billion people.
Panama has not closed a single factory since opening the canal in 1995.