Latin America and the Caribbean have reduced their unemployment rate to 7.9% in the first quarter of this year, but most of the jobs recovered are in informal conditions, which affects one in two people, revealed this Thursday the Organization Labor International (ILO).
The interim regional director of the ILO for Latin America and the Caribbean, Claudia Coenjaerts, warned in a virtual presentation that “it is calculated between 50 and 80% of jobs recovered in 2022 are in informal conditions” and that the current crisis, due to the upward trend in inflation, might generate a further increase in labor informality.
He stressed that there are countries in the region with more than 70% of their informal workers, while the average in Latin America and the Caribbean is 50%, which, added to lower income, has opened the door “to the phenomenon of the working poor”.
Likewise, the regional director pointed out that prices began to rise in 2021 following the COVID-19 pandemic, but are currently under “more pressure due to the war in Ukraine”, which directly affects the level of real income for consumers. workers.
“The loss of labor income gives rise to the phenomenon of the working poor”, which, even with a formal job, cannot cover all their basic needs, stated Coenjaerts during the presentation of the technical note “Weak growth and global crisis slow recovery of employment in Latin America and the Caribbean”.
In the first quarter of the year, the unemployment rate fell to 7.9%, compared to 8.7% in the same quarter of 2019, while the employment rate has risen to 57.2%, compared to 57.6% in 2019, and the rate of participation stands at 62.1%, compared to 63.1% three years ago.
Raise minimum wages and negotiate
The interim regional director stressed that “it is crucial for countries to put in place a mix of policies to deal with deteriorating labor markets”, that consider the increase of the minimum wage and the collective negotiations with the workers.
For her part, ILO labor economist Roxana Maurizio, author of the report, said that most of the countries that have returned to 2019 employment rates, “the rate is not higher than in the pre-pandemic situation.”
However, he noted that the most “worrisome” is that it is “under a decade with a very high rate of informality, which has remained at high levels”.
He stated that one of the biggest complications in the context of the pandemic has been conciliation in family matters, but also that some sectors that demand female employment “are far from having recovered their pre-pandemic levels”.
Similarly, young people have a higher level of job recovery, but the rate of informality in this sector is above 63%.
Maurizio noted the loss of purchasing power of average and minimum wages in the face of rising inflation and that in 9 of the 14 countries analyzed there was a fall in the purchasing value of minimum wages.
unprotected worker
Given the lower real income, the economist confirmed the appearance of the phenomenon of the poor worker, where “occupation is not insurance once morest poverty” and represents “a setback in the quality of life of citizens”.
The expert recommended that the labor policies of the States have to “support the creation of new formal jobs, professional training to navigate in new conditions, and the strengthening of labor institutions”, among other actions.
Maurizio stressed that job recovery projections are closely linked to the economic recovery in the region, where the latest estimates from the Economic Commission for Latin America and the Caribbean (ECLAC) give an average growth of 2.7% for 2022.
