A construction worker in Panama.efe
Employment has recovered in Latin America since the economic crisis triggered by covid-19, the International Labor Organization (ILO) reported on Tuesday in its annual report.
The unemployment rate, which represents the proportion of the labor force that is unemployed, fell to 7.2% at the end of last year.
During the first quarter of 2020, when the coronavirus pandemic broke out, that figure stood at 9%.
The decline in unemployment "is positive news, especially after the large-scale crisis caused by the pandemic," said the ILO's regional director for Latin America and the Caribbean, Claudia Coenjaerts, in a press release published on Tuesday.
However, the high level of informality and labor poverty continue to hinder the labor markets in the region.
In addition, the recovery was not homogeneous.
In nine of 15 countries, the employment rate at the end of last year was lower than that registered three years earlier, while in only two of 15 countries the labor participation rate exceeded pre-pandemic levels.
"Labor markets in the region are under the influence of a conjunction of multiple interconnected crises," Coenjaerts said at a virtual press conference, such as "the persistence of the covid-19 pandemic in some countries, the war for the invasion of Russia-Ukraine and an economic context characterized by slow growth and high inflation”.
The ILO considers that the low dynamism of the global economy forecast for this year will negatively affect the generation of new jobs.
The report ensures that the recovery of employment in 2022 was more intense among women than among men, and among young people than among adults, two groups that were the most affected in labor matters by the pandemic.
"On the other hand, structural gender and age gaps are still present in the labor markets," the ILO said in its statement.
Despite the progress, high informality persists in the region, Coenjaerts noted.
“The phenomenon of the working poor means that people can live in a situation of poverty even if they have a job, even a formal job,” said the director.
The ILO recorded an increase in the percentage of working poor.
According to the report, the incidence of working poverty increased in most of the ten countries considered in this part of the study compared to 2019. In some cases, the levels even exceed those registered a decade ago, in 2012. This it has to do with informality, Coenjaerts explained, since informal workers are three to four times more likely to be poor than formal workers.
"In addition to informality, the countries of the region will have to face the consequences of a period of high inflation and loss of value of real wages, which constitute the main source of income for Latin American and Caribbean families," said Coenjaerts.
In this region, 80% of income comes from work.
“The recovery of real labor income has been making it difficult since 2021, because inflation has a negative impact on the purchasing power of wages.
In nine of 17 countries in the region, the real value of the minimum wage in the second half of 2022 was lower than the value it had in the first half of 2019, with a very high correlation between informality, low income, and working poverty," said Coenjaerts. .