The Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) released today a new edition of their joint report Labor Situation in Latin America and the Caribbean (No 28): Towards the creation of better employment in the post-pandemic, where the evolution of labor markets in Latin America and the Caribbean in 2022 is analyzed.
The report highlights that three years after the COVID-19 crisis, the main labor indicators have returned to the values prevailing in 2019. The improvement in variables such as the labor participation rate, the unemployment rate, and the number of employed began in 2021, it continued in 2022, although the number of employed grew at a slower rate than in 2021. The recovery has been heterogeneous throughout the region, and, in certain countries, some indicators have not yet reached pre-pandemic levels. Similarly, recovery has tended to be greater among women than among men, and greater among young people than among adults, the document emphasizes.
The publication points out that, despite the improvement, there are still significant gender and age gaps in terms of participation rates and job unemployment. Average labor productivity in the region experienced a drop in 2022, highlighting the contraction in productivity in sectors such as industry, construction, and commerce. For their part, real average wages stagnated in 2022, contrasting with the increase observed in 2021, and reflecting the impact of higher inflation.
The progress observed in labor markets between 2020 and 2022 reflects a cyclical recovery in economic growth that is not sustainable over time. In fact, ECLAC projects regional economic growth of 1.2% for 2023, which will undoubtedly also result in less dynamism in job creation, and the estimated increase in the number of employed is less than 2 %, which contrasts with the 5.9% growth experienced in 2022.
The report highlights the fact that the main indicators and the composition of the labor market return to pre-pandemic levels is not enough, given that the structural problems that characterize labor markets in the region are still present. Informal employment remains high, and despite the improvements registered in 2022, significant gender gaps persist in terms of participation and unemployment rates. Also wages and productivity have returned to their pre-crisis trajectories, which means stagnation at best, he warns.
According to ECLAC and ILO, to reverse this situation it is necessary to have active labor policies in the region that promote greater job creation, greater formalization and greater (and better) inclusion of women and youth in the labor market. To do this, it is necessary to expand the instruments in terms of labor policy and improve the articulation between them, in order to avoid contractions in employment. More emphasis is also required on economic reactivation, including sectors that drive and stimulate economic growth and employment.