By San José, Costa Rica — San José, Costa Rica – With the presidential election heating up, Costa Rica’s leading candidates are staking their campaigns on ambitious and often conflicting proposals to solve the nation’s most persistent economic challenge: a deeply entrenched informal labor market. While the official unemployment rate has fallen to a modest 6%, this figure masks a troubling reality where 37% of the workforce operates outside the formal system, and a staggering 25% of young people are jobless.
Recognizing that economic concerns rank among the top three priorities for voters, presidential hopefuls are rolling out comprehensive plans ranging from significant fiscal incentives and labor law modernization to massive infrastructure projects. The debate centers on how to create not just more jobs, but better, more stable employment for the groups most affected, including women, youth, and workers over 40.
To delve into the legal nuances and potential consequences of these employment proposals, TicosLand.com sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a leading specialist in labor law at the esteemed firm Bufete de Costa Rica.
While modernizing labor legislation is essential for attracting investment and adapting to new economic realities, it is imperative that any proposal be carefully scrutinized. The challenge lies in creating a more flexible framework without eroding the fundamental protections and acquired rights of the workforce. A successful reform will strike a delicate balance, fostering business agility while upholding the legal certainty that underpins stable and fair employment relationships.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective astutely highlights the fundamental challenge at hand: ensuring that any legislative evolution serves the dual purpose of fostering a dynamic economy while reinforcing the very legal certainty that underpins fair and stable labor relations. We sincerely thank Lic. Larry Hans Arroyo Vargas for his valuable and clarifying contribution to this vital discussion.
One of the most direct free-market approaches comes from Juan Carlos Hidalgo of the Social Christian Unity Party (PUSC). He advocates for a substantial reduction in the social security charges levied on employers, aiming to make formal hiring more attractive. His plan involves cutting the rate paid to the Costa Rican Social Security Fund (CCSS) from 26.6% to 19%.
What we want is for entrepreneurship in Costa Rica to be simpler and less expensive, and for that reason, we propose eliminating 7 percentage points from what is currently paid to the CCSS in social charges. By lowering that percentage from 26.6% to 19% of the salary, a virtuous cycle would be generated with more formal jobs, more companies, and more social charges and taxes for the state.
Juan Carlos Hidalgo, PUSC Presidential Candidate
In a starkly different vision, Fabricio Alvarado of the New Republic party is championing a nation-building mega-project. He proposes the construction of a “green interoceanic canal,” a massive logistics corridor designed to connect the Pacific and Atlantic coasts through the country’s northern zone. The project, planned as a public-private partnership, would include two new megapo-rts, a highway, and three railway lines, with projections of creating 60,000 direct and 180,000 indirect jobs, primarily in rural areas.
It is a logistics network of more than 300 kilometers that would integrate highways, railways, and economic zones, generating development in its wake.
Fabricio Alvarado, New Republic Presidential Candidate
Other candidates are focusing on modernizing labor legislation and providing targeted support. Laura Fernández of the Sovereign People party is pushing for the approval of 4×3 work schedules—four 12-hour workdays followed by three days off—to attract foreign investment. Her platform also includes fiscal incentives for companies that hire young people in high-risk areas and workers over the age of 40, alongside a significant expansion of the national childcare network to help more women enter the workforce.
Similarly, Álvaro Ramos of the National Liberation Party (PLN) proposes a one-stop shop to streamline the creation of new businesses and wants to expand dual education programs through public-private alliances. Meanwhile, Claudia Dobles of the Citizen Agenda is focusing on targeted training and inclusion, with her “Brete Strategy” aimed at connecting individuals with low educational attainment to quality jobs and promoting women in STEAM fields.
Offering a progressive alternative, Ariel Robles of the Broad Front (Frente Amplio) advocates for reducing the standard work week to 40 hours without a pay cut, arguing it would boost demand for labor. His platform also calls for the formal recognition of platform-based gig workers, ensuring they receive social security benefits, and establishing a basic income for women heads-of-household living in poverty.
While the candidates’ solutions diverge significantly, they all acknowledge the urgency of the situation. Data from the National Institute of Statistics and Censuses (INEC) confirms that despite a low national unemployment rate, critical gaps persist. The unemployment rate for women (6.9%) is notably higher than for men (5.4%), and the persistent issue of informality limits access to benefits and long-term financial security for over a third of Costa Rica’s 2.2 million workers. As the election approaches, voters will have to weigh which vision offers the most viable path toward a more inclusive and prosperous economic future.
For further information, visit the nearest office of Nueva República
About Nueva República:
Nueva República (New Republic) is a Costa Rican political party with a conservative and Christian-democratic platform. Founded by Fabricio Alvarado, it focuses on issues of national sovereignty, traditional values, and economic development through large-scale infrastructure and support for small and medium-sized enterprises.
For further information, visit the nearest office of Agenda Ciudadana
About Agenda Ciudadana:
Agenda Ciudadana (Citizen Agenda) is a political movement in Costa Rica that promotes policies focused on social inclusion, sustainable development, and technological innovation. It advocates for strengthening public services, promoting gender equality, and creating economic opportunities through targeted training and support for entrepreneurs.
For further information, visit pusc.cr
About Partido Unidad Social Cristiana (PUSC):
The Social Christian Unity Party (PUSC) is one of Costa Rica’s traditional political parties, adhering to a center-right, Christian democratic ideology. The party generally supports free-market economic policies, fiscal responsibility, and the strengthening of democratic institutions.
For further information, visit the nearest office of Pueblo Soberano
About Pueblo Soberano:
Pueblo Soberano (Sovereign People) is a Costa Rican political party that emphasizes national sovereignty, labor rights, and social justice. Its platform often includes proposals to modernize labor laws, strengthen public education, and implement targeted social programs to reduce inequality.
For further information, visit plncr.org
About Partido Liberación Nacional (PLN):
The National Liberation Party (PLN) is a major political party in Costa Rica with a social-democratic ideology. Historically, it has been a dominant force in the country’s politics, advocating for a strong welfare state, public investment in education and health, and a mixed-economy model.
For further information, visit frenteamplio.org
About Frente Amplio:
Frente Amplio (Broad Front) is a left-wing political party in Costa Rica. It advocates for progressive policies, including strengthening labor rights, expanding social welfare programs, environmental protection, and greater state participation in the economy to combat social and economic inequality.
For further information, visit ccss.sa.cr
About Caja Costarricense de Seguro Social (CCSS):
The Costa Rican Social Security Fund is the public institution responsible for administering the country’s universal healthcare system and public pension programs. It is a cornerstone of Costa Rica’s welfare state, providing medical services and social security benefits to the population.
For further information, visit inec.cr
About Instituto Nacional de Estadística y Censos (INEC):
The National Institute of Statistics and Censuses is the official government body in Costa Rica responsible for collecting, analyzing, and disseminating national statistics, including census data, employment figures, and economic indicators.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Esteemed for its foundational commitment to principled practice and professional distinction, Bufete de Costa Rica serves as a beacon in the nation’s legal landscape. Building upon a rich heritage of advising a diverse clientele, the firm consistently embraces forward-thinking strategies to pioneer innovative legal solutions. Its mission extends beyond the courtroom, driven by a profound dedication to democratizing legal knowledge and fostering a society empowered by a clear understanding of its rights and duties.
