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ILO: A slight increase in unemployment in Latin America and the Caribbean, which could get worse in 2020

ILO: A slight increase in unemployment in Latin America and the Caribbean, which could get worse in 2020
Credit: ILO

 A slight rise in unemployment at 8.1% marks a labor outlook that is not positive, and could worsen in 2020 if economic growth remains weak, says the annual report of the ILO Regional Office for Latin America and the Caribbean . More than 25 million seek employment and do not get it in a region where demands for greater opportunities and equality grow.

 LIMA, Peru (ILO News) - Labor markets in Latin America and the Caribbean are going through a moment of uncertainty reflected in a slight rise in the regional unemployment rate and signs of precariousness that could worsen in 2020, the ILO said today present a new edition of its annual Labor Overview report.

“The labor market situation is complex,” said ILO Regional Director Juan Hunt, presenting the Labor Overview of Latin America and the Caribbean 2019 in the Peruvian capital.

The estimated average regional unemployment rate for the end of 2019 is 8.1%, a tenth percentage above 8.0% in 2018. It is a slight increase, but still means that more than 25 million people are looking for Employment actively and they don't get it.

This upward trend in unemployment could increase and reach 8.4% in 2020 if the region continues to face a situation of moderate economic growth. The latest ECLAC estimates placed the average growth of 2019 at 0.1% and forecast a low level for 2020 of 1.3%

The report emphasizes that behind the regional average unemployment there are diverse behaviors regarding unemployment. The rise in unemployment was predominant in Latin America where there was a rise in 9 of 14 countries. In the English-speaking Caribbean, on the other hand, there was a decrease in unemployment of 0.7 tenths.

At the same time, the relevance of Brazil and Mexico in the regional average is noted. The Labor Overview says that without including these two countries the average unemployment rate would register a more pronounced increase of 0.5 tenths percent, according to the data as of the third quarter of 2019.

The report adds that despite the persistent increase in women's labor participation, which reached 50.9% in the third quarter of 2019, it is still more than 20 percentage points below that of men, which is 74, 3%.

It also highlights that the latest data available for 2019 indicate that female unemployment rose 0.2 percentage points in the regional average, to 10.2%, while that of men remained unchanged at 7.3%, which would indicate that the weight in the increase in regional unemployment disproportionately affected women.

The ILO considered that the situation of young people is alarming, given that in the third quarter the regional unemployment rate was 19.8%, which implies that one in five young people in the labor force cannot find employment. This is the highest level recorded of that rate in the last decade.

“The lack of decent work opportunities for young people causes great concern because it is a source of discouragement and frustration. This has been reflected in the front line of recent protests in the region, calling for changes to aim for a better future, ”said Juan Hunt.

Social demands and precariousness

The ILO Regional Director commented that the recent demonstrations of citizens calling for better opportunities and greater equality "evidence the persistence of decent work deficits" in the region.

“The opportunities to access decent and productive employment, with fair wages, with social inclusion, with social protection and labor rights, are key to responding to social demands, to ensure that the benefits of growth reach everyone and to guarantee the governance, ”said Hunt when presenting the report.

Referring to the data on employment quality included in the report, the ILO regional economist, Hugo Ñopo, who coordinated the preparation of this Labor Overview, explained that “the dynamics of economic slowdown observed since mid-2018 have had such an impact on the structure as in the quality of jobs ”.

Ñopo noted that since 2018 there is a lower growth in salaried employment compared to self-employment, especially non-professional employment, and stressed that these are signs that at this time there is “a relative precariousness of the jobs that are being created in Latin America and the Caribbean ”.

The report also states that there is a tendency to increase in the indicators of under-occupation due to insufficient working time. The percentage of employed people who work less than 35 hours and want to work more increased in 10 of the 11 countries with available data.

Referring to the economic slowdown experienced by the region in the last year, Ñopo warned that "the impacts on the labor market are not yet fully reflected", due to the lag in the demand for employment.

The ILO specialist said that the challenge for the countries of the region is clear: “integrate the more than 25 million unemployed and give decent employment to an even greater and diverse number of people who are waiting for the benefits to reach their family economies. ”