BRIDGETOWN, Barbados, Tuesday October 27, 2015 – The deceleration of economic growth seen during 2015 is affecting labour indicators in the region and will take the urban unemployment rate to 6.6 per cent this year, after marking 6 per cent in 2014, according to new estimates released today by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO).
The United Nations organizations unveiled a new edition of their joint publication ‘The Employment Situation in Latin America and the Caribbean’, in which they review the evolution of the region’s job markets in the first semester of 2015 and indicate that the unfavorable growth prospects for this year — which forecast a -0.3 per cent contraction, according to ECLAC’s latest estimates — will likely be reflected in the persistent weakness of labour demand and salaried job creation.
The report confirms that during the first semester of 2015, the employment rate recorded a new decline with respect to the same period last year. An increase in the number of people looking for work began to negatively affect the unemployment rate, which rose to an average of 6.5 per cent in the first semester, compared with 6.2 per cent in the same period of 2014.
ECLAC and ILO add that in the current macroeconomic and labour context one could expect to see an expansion of informal jobs, and freelance work above all, in many countries to partially make up for the lack of productive and good-quality employment opportunities.
According to the document, the current regional trend towards economic deceleration is worrisome because it reduces room for making gains on the reduction of poverty and inequality, two of the region’s important achievements since the beginning of the last decade.
In the report, ECLAC and ILO call for boosting investment aimed at a structural change that will lead economic growth potential towards a path of growing productivity.
“Only with clear productive development policies will the region be capable of overcoming the adverse context that currently hinders its expansion and of creating more and better jobs for the productive insertion of its labour force,” Alicia Bárcena, ECLAC’s Executive Secretary, and José Manuel Salazar, Director of the ILO Regional Office for Latin America and the Caribbean, stated in the publication’s prologue.
In this area, the report analyzes if the progress made in the prior decade was structural enough to prevent the loss of those achievements in a less favorable economic context.
This edition of the report also compares the labour performance of different types of companies. It concludes that the positive evolution of job markets between 2003 and 2013 included both small and large businesses. Specifically, in the first category the proportion of salaried employment and health insurance coverage rose. However, there continue to be marked gaps in terms of productivity and the quality of jobs between companies of different sizes.
ECLAC and ILO say that in the current, less favorable economic context, small companies as well as freelance jobs could once again play the role of creating the employment of last resort. Nevertheless, to prevent these jobs from being low in productivity and quality, the region must intensify efforts to remove hurdles and create an environment conducive to their growth and development, especially in the case of medium-sized companies.
The organizations add that the growth of these companies should be promoted through more incorporation of technology, access to adequate financing, greater innovation, better access to markets, and a more qualified labour force.