Unemployment in Latin America stands at 7.9% and returns to pre-pandemic numbers, according to the ILO

Workers from the cleaning area of ​​the Congress of the State of Veracruz (Mexico) demonstrated last year to demand a labor contract with benefits from the deputies. Yerania Rolón (Cuartoscuro)

Employment in Latin America is recovering and average unemployment is already reaching the numbers prior to the covid-19 pandemic, as reported this Thursday by the International Labor Organization (ILO).

However, the deterioration of global economic conditions, such as the rise in prices, low growth and the uncertainty generated by the war in Ukraine are limiting the recovery of workers' income.

The regional unemployment rate fell from 8.7% in the first quarter of 2021 to 7.9% in the first quarter of this year and returned to comparable levels with the beginning of the health crisis, the organization said in a statement, "but the labor panorama of the region, also affected by the impacts of the war in Ukraine, can be complicated by greater informality and working poverty”.

The labor markets of the region face a complex future so that 2022 will be characterized by an increase in unemployment, informality and the number of poor workers.

In other words, those who, despite having a job, whether formal or informal, do not have enough to cover their basic needs.

In 10 of 14 countries included by the ILO in its report, the employment rate in the first quarter of 2022 had not yet recovered the values ​​registered in the same period of 2019. On the other hand, only in three of the 14 countries the employment rate integration in the labor market in the first quarter of 2022 had recovered the levels of the first quarter of 2019. The ILO also found that between 50% and 80% of the jobs generated during the recovery have been in informal conditions.

The largest reductions in unemployment between the first quarter of 2021 and the same quarter of this year were seen in Argentina, Brazil and Jamaica.

Meanwhile, in Costa Rica it went from 11.3% to 13.6%;

in Paraguay it was from 6.9% to 8.5%;

and in Chile from 7.2% to 7.8%.

In Mexico there was no change in one year, with a rate of 3.5%.

At a virtual press conference, the ILO regional director for Latin America, Claudia Coenjaerts, warned: "The recovery of regional rates is positive news after the devastating impact of covid-19."

However, “greater informality and an increase in the number of poor workers are shaping up to be major challenges for the labor markets of Latin America and the Caribbean in 2022″, she assured Coenjaerts.

50% of the Latin American economy operates informally, the organization reported.

This rate is much higher, at 63%, among young people, who have the lowest paid jobs and the most precarious conditions.

"If we look at the unemployment rate in the case of young people, it fell compared to the maximum values ​​we had back in 2019 before the pandemic," Roxana Maurizio, labor economist at the ILO Regional Office, told a press conference. author of the report released Thursday.

“When we look at the evolution of these labor indicators and incorporate the monetary dimension, the income dimension and the inequality dimension, important trends also appear,” said Maurizio.

The recovery of employment also implied the recovery of the total income from work, and not from social assistance programs or remittances, for example.

“However, when we compare the current situation with the one we observed at the end of 2019, in most of the countries, this total family income has not fully recovered what was lost and therefore is still below it,” added Maurizio.

The percentage of households that still do not have labor income at the beginning of this year exceeded what was observed before the pandemic, the ILO reported.

"This is clearly a major concern globally as well as regionally and has to do with the loss of purchasing power of wages from labor income hand in hand with accelerating inflation," Maurizio said.

Average inflation in the Latin American region last year is estimated at 9.8%, and could be higher this year.