Latin America will have a labor market "highly complex" in 2023, indicates the ILO

First modification: 02/09/2023 – 04:11

Despite the drop in unemployment in Latin America and the Caribbean, the ILO warns in its most recent report that the labor market could stagnate in 2023 due to various global crises such as the side effects of the war in Ukraine and the consequences of the pandemic.

“At this moment, it is urgent to implement and strengthen different types of policies that contribute to the creation of formal employment and the maintenance of labor income,” said the ILO regional director for Latin America and the Caribbean, Claudia Coenjaerts, in the presentation of the annual Labor Overview report.

According to the organization, the unemployment rate fell in 2022 to 7.2%, a figure “significantly lower” than that of 2019 when it registered a level of 8%. The report highlights that the recovery of employment in 2022 was more intense among women than among men, and among young people more than among adults.

Both cases address groups that had been especially impacted by the labor crisis caused by the pandemic, but it warns that structural gaps by gender and age are still present in the labor markets.

For Coenjaerts, the drop in unemployment “is positive news, especially after the large-scale crisis caused by the pandemic”, but he stated that this year this progress could stall.

“The low dynamism of the economy forecast for 2023 will negatively affect the generation of new jobs and that will cause unemployment to register variations in 2023, reaching levels between 7.2% and 7.5%,” he said.

The Labor Overview highlights that the region is affected “by the conjunction of multiple crises at the global level, such as the persistence of the pandemic or the war between Russia and Ukraine, and at the same time faces the prospect of low economic growth, the consequences of high inflation, limited fiscal space and high levels of indebtedness”.

For this reason, the report presents “a complex and uncertain scenario.” Coenjaerts explained that in this economic scenario, “the most urgent labor problem for the region is the quality of employment and the insufficient labor and total income generated by workers and your families”.

The report adds that the regional informality rate has already reached 50%, as it was before the pandemic, although in some countries it is much higher. “The reality is that one in two people works informally, which is usually accompanied by job instability, low income, and no social protection,” Coenjaerts concluded.

with EFE