Latin America, Caribbean show meager economic recovery after two years of pandemic, ILO reports

Covid19 Lockdown. Image credit: Unsplash

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According to a new regional Labour Overview report by the ILO, with an unemployment rate of 9.6 percent, the region must face the prospect of a prolongation of the COVID-19 crisis in employment.

Slow market recovery due to Pandemic. Image credit: Unsplash

LIMA, Peru: The economic growth recorded in 2021, was meagre for the recovery of labour markets in Latin America and the Caribbean and offers a risk of prolonged recovery in their labour overview from the Covid 19 crisis, says a new report released by the International Labour Organization (ILO).

The economic recovery in 2021, with growth above 6 percent, was insufficient to recover 4.5 million of the 49 million jobs that were lost at the worst point of the crisis in the second quarter of 2020.

“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,” said Vinícius Pinheiro, ILO Regional Director for Latin America and the Caribbean.

“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,” Pinheiro added.

Pinheiro explained that social comorbidities such as informality and inequality were the main factors of the severe impact of the pandemic in Latin America and the Caribbean, reflected in a greater loss of informal jobs that left millions of people without income.

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, with the most intense impact hotels and restaurants, and in other service activities and the household sector.

The new edition of the Labour Overview of Latin America and the Caribbean says that 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.

it is estimated that the beginning of 2022 would see about 28 million unemployed people in the region and that the unemployment rate this year could fall between 0.2 and 0.3 percentage points, remaining above 9 percent, insufficient to return to 2019 levels.

“Employment growth in 2021 was particularly significant in sectors such as construction (16.7 per cent), trade (9.1 per cent) and transport (6.7 per cent), which contrasts with what was observed in 2020, when these sectors registered strong contractions,” says the report.

“Without a coherent set of measures to generate jobs, the impacts of the crisis will be prolonged and will leave deep social and labour scars in Latin America and the Caribbean,” said The ILO’s Regional Specialist in Labour Economics, Roxana Maurizio, who coordinated the ILO team of specialists tasked with preparing this report.

The 2021 Labour Overview of Latin America and the Caribbean concludes that digital transitions, the greater presence of teleworking and the evident increase in services based on digital platforms pose significant challenges for policymakers to take advantage of the opportunities offered by these transformations and avoid potential disruptions in labour markets.

The report highlights the need to adapt the content and scope of vocational training to improve the fit between the supply and demand of qualifications, and the need for public policies to help remove the obstacles and ensure that this transition leads to the creation of more and better jobs.