Regional Director of the International Labour Organization (ILO) Vinícius Pinheiro.
We are entering 2021 with employment in intensive care, warned Regional Director of the International Labour Organization (ILO) Vinícius Pinheiro.
He was at the time launching the main findings of the 2020 Labour Overview for Latin America and the Caribbean.
“Over the last ten months, the labour markets in Latin America and the Caribbean have regressed at least ten years and the crisis is far from over… This is the largest crisis that this report has ever recorded in its entire existence – a report was first published in 1994,” Pinheiro said.
Confronted with this scenario, the countries of the region now face the challenge of “laying the foundations for a new and better normal”, which will imply adopting strategies to generate more and better jobs as production reactivates and the health emergency diminishes.
“Now it is essential to achieve economic growth with employment. Employment is crucial to reduce poverty and decrease the growing inequalities that this pandemic is leaving in the aftermath,” he added.
The 2020 Labour Overview registers a strong increase in the unemployment rate that rose to 2.5 percentage points compared to the previous year, going from 8.1 per cent to 10.6 per cent.
This means that the number of job seekers who cannot find work increased by 5.4 million and reached 30.1 million.
However the ILO report warns that in such an abrupt crisis scenario, the unemployment rate tells only part of the story. “This year there was an unprecedented transition towards inactivity by people who gave up looking for work due to the lack of opportunities. The participation rate plummeted by 5.4 percentage points to 57.2 per cent according to data available at the end of the third quarter of 2020.
Beyond the percentages, this means that some 23 million people were temporarily removed from the workforce and have lost their jobs and their income. As the economies recover, their return to the labour markets will create additional pressure on unemployment indicators for next year”.
In 2021, the unemployment rate could rise again to 11.2 per cent, said the ILO, considering factors such as moderate economic growth of around 3.5 per cent, which is insufficient to recover the lost ground caused by the crisis. There is also uncertainty surrounding the future of the COVID-19 pandemic, including fears about outbreaks and the effectiveness of vaccination processes.
The contraction in employment was particularly significant in-service sectors such as hotels (-17.6 per cent) and commerce (-12.0 per cent). On the other hand, it is also observed that the health crisis strongly affected employment in construction (-13.6 per cent) and industry (-8.9 per cent). The smallest drop in employment was observed in agriculture (-2.7 per cent).
Pinheiro emphasised that for the future it will be important to consider the lessons learned from this pandemic. “First, there is no dilemma between preserving health and economic activity because without health there is neither production nor consumption. Occupational health and safety is now a key issue for reactivation. Second, social dialogue is more relevant than ever because it allows for strategies agreed upon by governments, employers and workers to face the crisis,” he said.
He also stressed that it will be necessary to deal with “pre-existing conditions.” “The region was hit hard by this crisis, even more than others in the world, and this was largely due to structural problems that existed and were known to us,” said the ILO Regional Director.