ECLAC: Latin America and the Caribbean have the challenge of moving from job placement to job inclusion

Labor inclusion policies in the region require a strategic and comprehensive perspective, which also involves the educational, productive, fiscal, social and environmental fields, to name a few, agreed participants in the Third Regional Seminar on Social Development: Promoting labor inclusion as a way to overcome inequalities and informality in Latin America and the Caribbean held between June 27 and 29, 2023 at the ECLAC headquarters in Santiago, Chile.

“It will not be possible to create a better future of work without creating a better future of production, and vice versa. They are two sides of the same coin”, indicated, in this sense, José Manuel Salazar-Xirinachs, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), at the opening of the event held in a hybrid format and organized in collaboration with the International Labor Organization (ILO), the Norwegian Ministry of Foreign Affairs, the German Cooperation and the Ford Foundation.

Labor inclusion is made up of two successive and complementary phases: labor insertion and the conditions of the work that is accessed, as explained during the meeting that brought together government representatives from 22 Latin American and Caribbean countries, including 10 Ministers and Ministers of Labor, and which had an average of 800 people connected online daily.

“The challenge in the region is to move from job placement to job inclusion,” summed up the Director of ECLAC’s Social Development Division, Alberto Arenas de Mesa.

According to the latest statistics from ECLAC and the ILO, the unemployment rate in Latin America and the Caribbean was 7% in 2022. That is, 93% of the regional labor force is inserted in the labor market. “The problem is that 50% of the employed work informally, 40% receive a salary below the minimum and 1 in 5 is in a situation of poverty,” he stressed.

Labor inclusion policies face and reduce informality and inequality and, therefore, should be at the center of inclusive and sustainable social development strategies in the region, remarked the senior official, who participated in a closing discussion of the event with former Directors of the Social Development Division, including Andras Uthoff; Martín Hopenhayn (virtual) and Laís Abramo.

Labor markets are experiencing a slow-motion crisis in the region, contextualized Arenas de Mesa.

According to data from ECLAC, the COVID-19 pandemic triggered the biggest crisis that the labor markets of Latin America and the Caribbean have experienced since 1950.

In 2020, job creation fell 8.2%, being the only fall registered in the last 70 years and, between 2014 and 2023, the growth rate of the number of employed persons will be only 1.26%, compared to a 3.2% in the lost decade of the 1980s.

In addition, different barriers to entry into the labor market persist in the region: one in two women remains outside the labor market, youth labor participation is substantially lower than that of adults, and that of indigenous women is considerably lower than the average. of non-indigenous men and women, to name a few examples.

This is added to the fact that the labor markets are experiencing a period of high uncertainty, as highlighted during the event, since technological changes are generating a dynamic of transformation, destruction and creation of jobs.

According to ECLAC data, 28.4% of occupations have a high risk of automation in the region.

It is also estimated that 31.3% of workers are underqualified for the occupation in which they work. This skills mismatch threatens to deepen in the context of the future of work.

Within this framework, the Ministries of Labor are central to implementing and articulating labor inclusion policies, so it is a priority to strengthen public labor institutions in the countries of the region.

According to ECLAC, it is necessary to strengthen the prospective capacities of the Ministries of Labor (to anticipate future scenarios), as well as their strategic planning capacities; dialogue, leadership and negotiation; management (to articulate different sectors and levels of government and efficiently allocate available resources); and evaluation and accountability.

However, pointed out Arenas de Mesa, in Latin America and the Caribbean approximately 0.4% of the gross domestic product (GDP) is spent on labor policies. To guarantee the sustainability of labor inclusion policies, a broad and transversal social pact is needed, he concluded.

During the three days of the meeting, which featured six thematic panels, a discussion and keynote talks given by world-renowned specialists, topics such as labor informality, child labor, youth labor inclusion, the present and future of work, the development of skills for labor inclusion and the articulation between labor and social protection policies.