ILO Report: Employment back to pre-COVID-19 levels

The labour markets in Latin America and the Caribbean, almost four years after the outbreak of the COVID-19 pandemic, show a full recovery in their employment rates.

However, these are still characterised by the persistence of gender gaps, youth unemployment, informality, and loss of purchasing power of wages, the ILO Regional Office said when it presented the 2023 edition of its Labour Overview report on Tuesday.

ILO Regional Director for Latin America and the Caribbean, Claudia Coenjaerts, noted that “the decline in the purchasing power of wages, both minimum and average, is a challenge that has a negative impact on the life quality of Latin American and Caribbean families. Despite the recovery in employment, the mass of total labour incomes is still below pre-pandemic levels”.

This year, the dynamics of the labour market in Latin America and the Caribbean were characterised by an increase of less than one per cent in the regional employment rate. Participation, on the other hand, decreased slightly compared to the previous year (62.3 per cent in 2023 compared to 62.5 per cent in 2022) and, finally, an average unemployment rate of 6.5 per cent.

The recovery in female employment continued to be more intense than that experienced by male employment. However, gender gaps are persistent and remain very high in Latin America and the Caribbean.

According to Coenjaerts, “the female labour participation rate is 23 per cent lower than that of men, while the employment rate is 22.5 per cent lower. These disparities are even deeper between different levels of education”. This situation spotlights the need to promote transformative care policies, which would allow for greater equality between men and women, since the latter bear the greatest burden of care.

The report warns on the situation of youth employment. The unemployment rate for young people is 14.4 per cent, more than double the overall rate of 6.5 per cent. Notwithstanding, some countries in the region show significantly higher rates than those, reaching values close to 30 per cent.

In addition, historical difficulties experienced by young people in the labour markets of the region persist. They face increased work intermittence explained by, in part, intense hires and dismissals from the workforce. The greater occupational instability, in turn, is associated with its higher prevalence in informal, precarious, low-skilled activities.

These challenges, the report warns, can be intensified by technological transformations. In the current context of a growing need for digital skills, vocational training emerges as an essential element to bridge the digital and skills gap between young people. In addition, it plays a crucial role in ensuring more employability and access to quality jobs for this group.

Job recovery has continued to be driven by growth in informal employment in most countries. Informal occupations have contributed to job creation by 40 and 95 per cent in the third quarter of 2020, and the second quarter of 2023.

The average labour market informality rate in the region stood at 48 per cent in mid-2023; however, in some countries, it exceeded 70 per cent.

“The region needs comprehensive measures that support the creation of formal jobs, strengthen labour institutions, and provide social protection and income to those who need it most in a constantly changing world of work,” Coenjaerts concluded.

As a special theme for the 30 years of uninterrupted publication of the Labour Overview report, an exhaustive analysis was carried out that seeks to provide a comprehensive vision of labour evolution and contextualised within the framework of the broader transformations that Latin America and the Caribbean have experienced over the last three decades.

It notes progress of women – although insufficient — in the world of work, with the labour force participation rate for women aged 15 and older rising from 41.3 per cent in the early 90s to 53.9 per cent on average in 2022, although it remains lower than that of men (76.3 per cent).

It also highlights the continuing challenge to youth inclusion and its projection toward decent work trajectories, in a context where youth unemployment rates more than double the totals, and employment and participation rates are significantly lower.

“Labour Overview is not only a guide to decision-making, but also a photograph and a historical record of what is happening in our region,” said Coenjaerts.
(ILO)