The unemployment rate in the Caribbean and Latin America jumped to 8.1 per cent in 2016 to 23 million, the highest in a decade, according to the 2016 Labour Overview of Latin America and the Caribbean published by the International Labour Organization (ILO) Regional Office.
The 1.5 per cent increase over 2015 means an additional five million people joined the ranks of unemployment this year, the ILO said.
“The labour scenario in the region worsened in 2016. There has been a sharp increase in unemployment, informality is increasing and the quality of employment has deteriorated,” said ILO Regional Director for Latin America and the Caribbean José Manuel Salazar in the executive summary.
While not giving a breakdown of the unemployment rate in individual countries, Salazar said there were significant differences among countries and between sub-regions.
In any event, he added, on average 2016 was “the worst year in a decade in terms of both economic growth and the unemployment rate” for the region.
Worryingly for the United Nations agency, the situation is likely to get even worse next year, with unemployment predicted to reach 8.4 per cent.
This could be compounded by “a reversal in some of the labour-related progress achieved in the region in the previous decade” over the past two years, Salazar said.
“Although with different combinations and degrees of urgency, the countries of Latin America and the Caribbean face a dual challenge: on the one hand to design short-term responses to mitigate the negative social and labour impacts of the deceleration and return to a growth path, and on the other to take action to address the structural problems of low productivity and the lack of productive diversification”, Salazar said.
According to the report, the unemployment rate was up in 13 of the 19 reporting countries as of the third quarter of the year, with more women –– a 1.9 per cent rise to 9.8 per cent –– out of work than men.
The data also showed that unemployment increased nearly three percentage points among young people up to age 25, raising the total youth unemployment rate to 18.3 per cent, also the highest in a decade.
Also troubling to the tripartite agency was the rise in informal employment.
“We estimate that some 134 million workers are in informal employment, a persistent phenomenon in our region, which poses a major challenge for policymakers”, said Juan Chacaltana, ILO’s regional specialist on employment, who coordinated the preparation of this 2016 Labour Overview.
In the report, the ILO said there were other indicators of deterioration in the quality of employment, including a 0.7 per cent fall in registered employment, and a 0.5 per cent increase in self-employment “associated with lower-quality working conditions”.
The report also noted that real average wages decreased by 1.3 per cent in 2015, and the trend was expected to continue this year based on data from eight countries as of the end of September, which show a decrease in wages in the registered or formal sector.
However, real minimum wages increased by an average of 4.4 per cent, with 14 of the 16 reporting countries recording rises as a result of efforts to raise minimum wages above the inflation rate.
As at July 2016 the unemployment rate in Barbados stood at about 10.1 per cent.