Economic growth in 2021 insufficient for labour markets’ recovery – ILO

…could prolong economic crisis to 2024
…unemployment rate among women remains high

The economic growth recorded in 2021 was insufficient for labour markets’ recovery in Latin America and the Caribbean, a new report by the International Labour Organisation (ILO) on Tuesday highlighted.
The Labour Overview of Latin America and the Caribbean notes that after two years of the crisis, the region faces high unemployment and the prospect of an increase in informality.
ILO Regional Director for Latin America and the Caribbean, Vinícius Pinheiro shared, “The labour outlook is uncertain, the persistence of infections due to the pandemic and the prospect of mediocre economic growth this year could prolong the employment crisis until 2023 or even 2024…An employment crisis that is too long is worrying, because it generates discouragement and frustration, which in turn has repercussions on social stability and governance.”
The new edition of the Labour Overview of Latin America and the Caribbean offers a look at the “worst employment crisis” since the ILO Regional Office first began publishing the annual report in 1994.
The strong economic recovery recorded in 2021, with growth above six per cent, is not enough to recover the jobs that were lost. Of the 49 million jobs that had been lost at the worst point of the crisis in the second quarter of 2020, 4.5 million have not been recovered.
About four million jobs correspond to people who have become unemployed owing to the pandemic crisis. At the beginning of 2022, it is estimated that there are about 28 million people looking for employment without much success.
The average regional unemployment rate at the end of 2021 has been estimated at 9.6 per cent, which represents an improvement from the 10.6 per cent it reached in 2020, but a setback compared to the eight per cent that was recorded for 2019, which in this case is used as a reference to calculate the impact of two years of the pandemic.
The ILO highlights that the forecast of lower economic growth in 2022, just above two per cent, is a clear indication that it will take the region longer to get out of the COVID-19 crisis. Under these conditions, and considering the persistence of the pandemic, the ILO estimates that the unemployment rate this year could fall between 0.2 and 0.3 percentage points.
“In Latin America and the Caribbean, the pandemic had a more severe impact because of ‘social comorbidities’ such as informality and inequality,” Pinheiro explained.
The countries with available data indicate that between 60 and 80 per cent of the jobs recovered until the third quarter of 2021 had been in conditions of informality. The rate is already 49 per cent, similar to what it was before the pandemic, and indicates that one in two employed people are in informality.
The report also highlights that the unemployment rate for women remains high at 12.4 per cent since 2020 and it did not improve in 2021, which contributes to amplifying the impact of the crisis on gender inequality at work.
“The most intense impact among women in the region is associated with the greater presence of women in economic sectors strongly affected by the crisis such as hotels and restaurants, and in other service activities and the household sector. This impact can also be attributed to the higher incidence of informality among women,” says the report.
The regional youth unemployment rate continues to be of concern and remains at unprecedented levels, warns the ILO. Before the pandemic, it hovered around 18 per cent and was already considered too high. But with this crisis, it quickly exceeded the limit of 20 per cent and still remains at a level of 21.4 per cent.