“It is not possible to create a better future of work without creating a better future of production”: José Manuel Salazar-Xirinachs

“You cannot create a better future of work without creating a better future of production. They are two sides of the same coin”, stated this Thursday, June 1, 2023, José Manuel Salazar-Xirinachs, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), at the opening of the ECLAC-ifo-PILLARS Workshop: Effects on the labor market of automation and the adoption of technology in the world economy that is held in a hybrid way (face-to-face and virtual) in Santiago de Chile.

“To create decent jobs, it is essential to focus on a productive transition towards higher levels of investment and productivity, for which investment in education and professional training is also crucial. We must work both on the demand side of quality jobs and on the supply side,” explained the highest representative of the United Nations regional body.

The two-day meeting, in which world-renowned specialists participate, is organized by ECLAC and the Institute for Economic Research of the University of Munich (ifo), with funding from the Union’s Horizon 2020 research and innovation program European.

During his speech, José Manuel Salazar-Xirinachs drew attention to the endemic problem of low economic growth and low productivity that characterizes the Latin American and Caribbean region.

“Exceptional measures, agreements and doing things differently are required. This is not a temporary, short-term issue,” warned the Executive Secretary of ECLAC, who stressed that with mediocre growth rates, countries will not be able to create quality jobs or reduce poverty and informality, nor will they finance the social expenditures necessary to meet the 2030 Agenda for Sustainable Development and the aspirations of inclusive and sustainable growth.

“At ECLAC we have warned that in the region low productivity is an endemic disease on which it is a priority to work based on the implementation of ambitious and intelligent productive development policies,” he stressed.

According to ECLAC estimates for 12 countries, informality reached 50.4% of workers in the region in 2020 and it is expected that this figure could increase significantly in the following years due to the impacts of the COVID-19 pandemic. “This situation exposes workers to serious vulnerability in terms of their income, working conditions, access to labor rights and social protection,” he said.

On the other hand, José Manuel Salazar-Xirinachs argued that we are facing a complex panorama of impacts on the labor market due to automation, digitization and new technologies. “There are both risks and opportunities, and it is important to identify and anticipate both,” he noted.

“The impact of digital and automation technologies on the labor markets of the region will be greater to the extent that countries implement clear policies for productive development and human talent development, to transform the growth model and develop activities more sophisticated productive processes that allow the generation of quality jobs”, he summarized.

After his inaugural remarks, a high-level panel took place that included interventions by Pablo Mieres, Minister of Labor and Social Security of Uruguay; Fabio Bertranou, Director of the Office of the International Labor Organization (ILO) for the Southern Cone of Latin America; and Paulo Bastos, Senior Economist of the Development Research Group of the World Bank.

Minister Pablo Mieres recognized that changes in the world of work generate profound social impacts and, if action is not taken effectively, multiply social inequality. “The big answer to the future of work,” he said, “is to have a state-of-the-art education, with an eye and ear on labor market trends. The new generations, in order to successfully join the adult world, have to receive a formal education in tune with today’s world and with the trends of future society. This is the most complex challenge, because, in general, formal education in any society works very slowly and changes very occasionally”.

Fabio Bertranou of the ILO agreed that “the discussion on the future of work has to go hand in hand with the discussion on the future of production,” especially in a region like Latin America that “has production challenges, and in terms of productivity, enormous”. The official referred particularly to the importance of governance in the world of work to understand these dynamics of adoption of technologies and automation in the world of production. “The type of labor governance is not neutral,” he said, stressing that the institutions must accompany productive policies.

Finally, Paulo Bastos from the World Bank addressed some of the main trends that are being observed in developed and developing countries in terms of the impact on labor markets of the adoption of technologies, both in manufacturing and in the services sector, as well as such as the questions that arise from the possible expansion of the use of artificial intelligence and robotics in the coming years.

Benefits have been identified in terms of productivity, but also challenges, for example, in terms of income distribution, he said. From his perspective, in order to obtain productive benefits, it is important to allow the labor market to be flexible enough in terms of the adoption of technologies, but policies that guarantee the safety of workers must also be implemented to minimize the impacts on them and their families. .

Specialists from the Inter-American Development Bank (IDB), the Central Bank of Chile, the Institute for Economic Research of the University of Munich, Boston University, Aarhus University, the Institute for Applied Economic Research participate in the workshop. (Brazil), UNU-MERIT and Maastricht University, the Catholic University of Chile and the Adolfo Ibáñez University of Chile, among others.