The discouraging economic scenario for this year will result in a slight increase in the regional unemployment rate, which will reach 6.2% in 2015 after having registered 6.0% in 2014, according to estimates released today by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO). In a new edition of the joint paper, Labour Situation in Latin America and the Caribbean, both institutions indicate that the average economic growth, forecast at 1%, will prevent the reversal of the economic slowdown that began in 2011.
The stagnation of the gross domestic product (GDP) per capita will weaken the demand for labour and, consequently, job creation. A fall in the urban occupation rate – i.e. the ratio between the working population and the number of people of working age – has been predicted in the region for the third consecutive year. The report indicates that the fall in the labour participation rate in the region – i.e. the proportion of people of working age that belong to the labour force that are either working or unemployed – observed in 2014 is not expected to continue at the same rate in 2015, which added to the fall in the occupation rate will lead to an increase in unemployment, which will reach levels similar to 2013.
“The labour market scenario expected for 2015 is not very encouraging if we are looking for substantial progress that will lead to improvements regarding poverty and inequality”, say Alicia Bárcena, Executive Secretary of ECLAC, and Elizabeth Tinoco, Director of the ILO Regional Office for Latin America and the Caribbean, in the foreword of the document. In effect, the report indicates that during much of the last decade and the beginning of the current decade, Latin America and the Caribbean made significant progress in reducing poverty and in income distribution, within a global context that was characterized by increasing levels of inequality.
These improvements were due to the positive trend of the labour market as the source of paid employment and to a narrowing of the wage gap. In addition, public labour (minimum wage, formalisation, inspections) and non-labour (expansion of social protection and education) policies were implemented.
The first part of the ECLAC-ILO paper studies employment in the region in 2014 and blames the fall in the unemployment rate seen over the last year to the atypical behaviour of the labour markets in Argentina, Brazil and Mexico; in particular to a major fall in their labour force participation rates.
The second part of the report examines the extension of social protection within a context of widespread informal labour in the region. It says that, from the perspective of rights, the universalisation of social protection is essential in order to advance in building societies in which equality is the goal of any development strategy. United Nations’ bodies indicate that, in order to ensure universal access, contributory and non-contributory aspects must be included in social protection systems, which imply significant challenges, especially regarding institutional and funding systems.