February 7, 2022
According to the International Labour Organization’s Regional Labour Overview report, the economic growth recorded in 2021 was insufficient to recover labour markets in Latin America and the Caribbean. The Labour Overview of Latin America and the Caribbean notes that after two years of the crisis, the region faces high unemployment and the prospect of an increase in informality.
According to Vinícius Pinheiro, ILO Regional Director for Latin America and the Caribbean. “The labour outlook is uncertain, the persistence of infections due to the pandemic and the prospect of mediocre economic growth this year could prolong the employment crisis until 2023 or even 2024. An employment crisis that is too long is worrying because it generates discouragement and frustration, which in turn has repercussions on social stability and governance.”
The strong economic recovery recorded in 2021, with growth above 6 per cent, was not enough to recover the jobs that were lost. 4.5 million of the 49 million jobs that were lost at the worst point of the crisis in the second quarter of 2020 are yet to be recovered. Of these, 4 million jobs are people who have become unemployed due to the pandemic crisis, 500,00 are those that have not returned to the labour market. At the beginning of 2022, it is estimated that there are about 28 million unemployed people in the region.
The average regional unemployment rate at the end of 2021 has been estimated at 9.6 per cent, which represents an improvement from the 10.6 per cent it reached in 2020, but a setback compared to the 8 per cent that was recorded for 2019, which in this case is used as a reference to calculate the impact of two years of the pandemic.
The ILO estimates that the unemployment rate this year could fall between 0.2 and 0.3 percentage points, remaining above 9 per cent. This would be insufficient to return to 2019 levels when, in any case, the labour market situation was far from positive in a region that was already trapped in a scenario of slow growth, with low productivity and high levels of informality and inequality.
The ILO report highlights that after the beginning of the pandemic the crisis manifested itself in an atypical way and instead of affecting formal occupations more, it was reflected in a greater loss of informal jobs that left millions of people without income. In some countries, the rate of informality even fell.
But since then, the situation has been reversed. The countries with available data indicate that between 60 and 80 per cent of the jobs recovered until the third quarter of 2021 had been in conditions of informality. The rate is already 49 per cent, similar to what it was before the pandemic, and indicates that one in two employed people are in informality.
The report also highlights that the unemployment rate for women remains high at 12.4 per cent since 2020 and it did not improve in 2021, which contributes to amplifying the impact of the crisis on gender inequality at work.
The 2021 Labour Overview of Latin America and the Caribbean concludes with a special analysis of the challenge posed by digital transitions and the acceleration of trends caused by the pandemic, including the greater presence of teleworking and the evident increase in services based on digital platforms.
This new scenario poses significant challenges for policymakers to take advantage of the opportunities offered by these transformations and avoid potential disruptions in labour markets.
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