Low Economic Growth in 2014 Could Affect Employment in Latin America and the Caribbean
(May 22, 2014) The economic scenario in 2014, with an estimated growth rate of 2.7%, is far from auspicious for the evolution of the regional labor market and presents major challenges for labor market policy, said the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO) in a new joint report released today.
“Given the modest economic growth projected for the region in 2014 and current labor participation trends, a slow pace of employment creation is forecast, which means there will likely be no significant variations in the unemployment rate,” said the United Nations organizations in the latest edition of the report The employment situation in Latin America and the Caribbean.
ECLAC and ILO added that if the reduced economic dynamism translates into higher unemployment in some countries, it will be important for them to have unemployment insurance and other protective measures so they can confront this scenario.
The new edition of The employment situation in Latin America and the Caribbean takes stock of the labor markets during 2013 and emphasizes that despite the reduced economic dynamism and a minor drop in the employment rate, the unemployment rate kept falling between 2012 and 2013 and hit its lowest level in decades (6.2%).
Nevertheless, “there are doubts about the sustainability of this positive development in the near future,” the document insists.
According to the report, the weakness of economic growth was already evidenced in 2013 by cooling labor demand. In addition, salaried work grew at lower rates than in previous years, resulting in a slight decline in the employment rate. A positive development was that during 2013 the gap between men and women decreased in terms of participation, employment and unemployment, although significant differences persist and require additional efforts to achieve gender equality in the working world.
Young people were the most affected by the loss of labor dynamism since their unemployment rose between 2012 and 2013 to 14.3% from 14.0% -in contrast to adults,whose unemployment rate was 3.2 times lower- as a consequence of a notable fall in their employment rate (which was steeper than the decline in their labor participation).
In 2014 the region’s countries must make efforts to advance in the creation of quality jobs and, more specifically, to promote the productive labor incorporation of youth.
The joint ECLAC-ILO document also indicates that in addition to job creation in the last decade, the strengthening of social safety nets and the introduction of new social programs were important factors in reducing poverty. Among these, the conditional cash transfer programs stood out, benefiting 21% of the regional population.
These programs, by giving more liquidity to families, allow them to make better labor decisions with respect to their employability in dignified and equitable conditions and can contribute to creating a “virtuous cycle” of generating autonomous income on the part of the poorest and most vulnerable groups.
Nevertheless, the organizations warn that the transfer programs must be closely coordinated with comprehensive social protection systems and active labor market policies to ensure that “graduating” from these programs does not lead to a loss of rights for the families or to labor informality.
- Complete document. The employment situation in Latin America and the Caribbean Nr. 10.
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