By: Juan Rizzo y Julio Medina
Researchers at Centro de Investigaciones Económicas de la Espol
Every May 1st we commemorate International Workers’ Day, a date that recalls the historical struggles for better working conditions and, in particular, the eight-hour workday. Its modern origin is linked to the labor mobilizations in Chicago in 1886, which became an international symbol of worker organization and the fight for labor rights. Since then, May 1st is not only a pause in the calendar but an invitation to think about what kind of work supports our societies and what conditions allow that work to become well-being.
In economics, work occupies a central place because it connects two dimensions. On one hand, it is a factor of production: together with capital, technology and natural resources, it makes it possible to produce goods and services. On the other hand, it is the main source of income for households. That is why when we talk about the labor market we are not only talking about employment or unemployment; we talk about productivity, wages, social protection, inequality, social mobility and quality of life.
In the Ecuadorian case, the figures show a picture with progress but also with challenges. According to ENEMDU from INEC, in December 2025 adequate or full employment reached 37.1% of the economically active population, compared with 33.0% recorded in December 2024. In the same period, underemployment stood at 17.4%, its lowest level in the last seven years, while the national unemployment rate was 2.6%. These data suggest improvement in several labor indicators, especially when compared with the end of the previous year. However, the main challenge of the Ecuadorian labor market is not reduced to the absolute lack of jobs, but to the quality of those jobs. In December 2025, 54.2% of employed people were in the informal sector of the economy, a condition associated with less access to social security, less stability and fewer possibilities for productive growth.
This difference is important. A country can have a low unemployment rate and, at the same time, face deep labor problems. In economies with high informality, many people cannot afford to be unemployed: they work in whatever they find, even if incomes are unstable, hours are long or social protection is nonexistent. That is why looking only at the unemployment rate can lead to incomplete conclusions. The key indicator is broader: how many people access productive, stable jobs with sufficient income.
The International Labour Organization defines decent work as that which offers productive opportunities, fair income, safety at the workplace, social protection, freedom of association, equality of opportunities and possibilities for personal development. This definition is useful because it reminds us that work should not be understood only as another factor of production, but as a way to build dignity, autonomy and progress. Recent economic performance provides a relevant context. The Central Bank of Ecuador reported that in 2025 the country’s GDP grew 3.7%, driven mainly by increased exports, investment and household consumption. At the sectoral level, 16 of the 20 economic activities recorded growth, with dynamism in commerce, agriculture, food manufacturing, financial activities and professional services. This recovery is good news, but it raises a deeper question: how to turn economic growth into better jobs?
The answer is not automatic. For growth to translate into labor well-being productivity must rise. This means improving education and technical training, facilitating technology adoption, reducing barriers to formalization, strengthening access to productive credit and promoting sectors capable of generating quality employment. A stronger labor market is not created only by decree; it needs companies that can grow, workers with relevant skills and rules that incentivize hiring without neglecting labor rights.
It is also essential to recognize territorial gaps. In December 2025, adequate employment was 46.0% in urban areas and only 20.2% in rural areas. Income poverty also showed important differences: 13.8% in urban areas versus 37.6% in rural areas. These gaps show that the labor discussion cannot be separated from the productive structure of the territory. Improving rural employment requires thinking about infrastructure, connectivity, agro-productive value chains, technical assistance and access to markets. In this framework, the unified basic wage is also part of the debate. For 2026, Ecuador set the basic wage at USD 482, with an increase of USD 12 compared to the previous year, after an agreement between representatives of the Government, employers and workers. Dialogue is valuable because it recognizes that the labor market is not a space of isolated interests but of shared responsibility: workers seek better income, companies require sustainability and the State must provide clear rules and social protection.
May 1st, then, should not be only a commemorative date. It is an opportunity to see work as the bridge between economic growth and human development. Ecuador has shown recent signs of labor and economic recovery, but the central challenge remains building a more formal labor market.
Celebrating work means recognizing the daily effort of those who support households, companies, communities and institutions. But it also means taking on a collective task: that more and more Ecuadorians not only have an occupation, but a decent job, with sufficient income, protection and real opportunities for progress.
