Despite the improvement in labour markets in the first half of 2022, according to the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organisation (ILO), it is anticipated that a slowdown in growth in the second half will limit the region’s ability to create high-quality jobs.
The UN agencies note that the economies of Latin America and the Caribbean are dealing with a very complex macroeconomic, social, and environmental setting, which will have an impact on labour market dynamics, in their new joint study, Employment Situation in Latin America and the Caribbean.
According to the paper, the COVID-19 pandemic caused an unparalleled catastrophe in the economies and labour markets of Latin America and the Caribbean.
In earlier studies, ECLAC and the ILO emphasised that the region’s labour markets have suffered a “slow, partial, and unequal recovery” since the economies have resumed. But according to the latest analysis, positive changes in those markets’ key indicators were seen in the first half of 2022.
First, the report stated that the employment rate returned to its pre-crisis level in the second quarter of 2022. Additionally, it stated that the jobless rate dropped by 2.8 percentage points from the same time in 2021 to reach 7.3%, which is lower than pre-pandemic levels.
“This reduction in the unemployment rate was observed in all the countries studied,” the report said. “Similarly, there were improvements in the labour participation rate, although it is still below the level recorded prior to the health crisis.”
Another point raised in the report’s opening section is the fact that women, who were most impacted by the pandemic and whose recovery took longer than that of men in 2021, showed better positive tendencies.
According to the report: “Indeed, although in the first half of 2022, the unemployment rate fell for both men and women (by 2.3 and 3.4 percentage points, respectively), the decline was much sharper in the case of women, resulting in a narrowing of the unemployment gap, which went from a ratio of 1.5 to 1.4 between the first half of 2021 and the same period of 2022.”
Additionally, it was observed that the manufacturing industry had the highest rates of job growth and that pay employment had expanded more than own-account work since the first half of 2022. The report also showed that average real salaries had decreased as a result of the year’s first half’s sharp rise in inflation.
In the Employment Situation in Latin America and the Caribbean No. 27 report, ECLAC and the ILO also noted that the region’s economies face the challenge of reversing the slow growth in productivity and investment that has been observed since the debt crisis, in addition to the challenges posed by the current labour market situation.
ECLAC and the ILO contend that in order to change this and encourage the establishment of more well-paying, formal jobs, “it is necessary to raise the level of ambition of productive development policies, taking into account new policy approaches for achieving this and the new realities associated with the technological revolution and the new productive paradigms it is generating”.
In addition, the report said productive development policies must have “a proper macroeconomic and financial framework”. ECLAC and the ILO, however, highlighted “the positive experiences with social dialogues carried out in the context of the productivity councils established in the region”.
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