Latin America Registers the Highest Level of Unemployment in its History


“The Coronavirus Pandemic plunged Latin America and the Caribbean into an unprecedented economic and social crisis that has left, so far, a record 41 million people unemployed. The impact of this situation will translate into increased inequality and poverty”, according to a report released by the International Labor Organization (ILO), this past Wednesday, from its Latin American headquarters in Lima (Peru).
The agency predicts that the average unemployment rate, which at the end of 2019 was 8.1%, will grow between 4 and 5 points, although this data is subject to the health and social situation in the countries of the region not worsening. “As the projections for 2020 show a further economic contraction, and unemployment will surely show even higher levels along with the deterioration of other indicators of the labor market,” says the report.

Forecasts for this year were already negative even before the Coronavirus. In January, the ILO estimated that the weakness in regional economic growth would affect the rise in the number of unemployed, which stood at 25 million people at that time. “We have reached a historic record of 41 million people unemployed, never seen in Latin America and the Caribbean, the highest number in the region’s history,” Vinicius Pinheiro, ILO regional director, said in presenting the report via videoconference.
He affirmed that for the Latin American countries the current crisis is of rapid and drastic impact, which adds to structural limitations due to the high informality of work, the little space for fiscal measures and the weakness of health and social protection systems.

The ILO estimates that around 60% of workers currently employed in Latin America and the Caribbean are exposed to possible loss of employment, working hours and income.

Another phenomenon highlighted by the ILO is that unemployment rates do not describe the magnitude of the crisis, since there are “strong transitions from activity to inactivity as a consequence of confinement or lack of job opportunities”.
Likewise, contractions are registered in working hours, a situation that is reported globally but has its worst reflection in Latin America and the Caribbean, according to the ILO. The decline in working hours is 20%, equivalent to about 55 million full-time jobs in an average 40-hour work week, and 47 million jobs in average 48-hour work weeks.

However, “the Pandemic cannot be an excuse for worsening working conditions, the key to balancing the need to reopen economies with sanitary distancing measures, may be health and safety protocols at work.

As confinement becomes more flexible, the way out is fairly rigid protocols until a vaccine is available,” Pinheiro said.

The ILO also proposes a four-pillar strategy, which includes stimulating the economy with active and flexible fiscal and monetary policies; and support to companies and workers by extending social protection, encouraging the maintenance of jobs, with tax relief for companies.

Other pillars are health protection in the workplace and the search for solutions through social dialogue between authorities, unions, business associations and labor institutions.

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