The labour markets in Latin America and the Caribbean, almost four years after the outbreak of the COVID-19 pandemic, show a full recovery in their employment rates. However, these are still characterized by the persistence of gender gaps, youth unemployment, informality, and loss of purchasing power of wages, the ILO Regional Office said today when it presented the 2023 edition of its Labour Overview report.
During the presentation of the 2023 Labour Overview, ILO Regional Director for Latin America and the Caribbean, Claudia Coenjaerts, noted that “the decline in the purchasing power of wages, both minimum and average, is a challenge that has a negative impact on the life quality of Latin American and Caribbean families. Despite the recovery in employment, the mass of total labour incomes is still below pre-pandemic levels.”
In the international context, characterized by moderate global growth and high inflation- Latin America and Caribbean economies have experienced a widespread recovery, although they still face a complex macroeconomic scenario.
The world economy is projected to grow by 2.9 per cent in 2023 and, in our region, growth is expected to be 2.3 per cent, according to the IMF, and 2.2 per cent, according to ECLAC, for the same period. “While these rates indicate a recovery, they are below the levels reached in 2022,” Coenjaerts said.
This year, the dynamics of the labour market in Latin America and the Caribbean were characterized by an increase of less than 1 percent in the regional employment rate. Participation, on the other hand, decreased slightly compared to the previous year (62.3 percent in 2023 compared to 62.5 percent in 2022) and, finally, an average unemployment rate of 6.5 percent.
“While urban employment returned to 2019 rates, there is still some lag in rural employment,” said Roxana Maurizio, report coordinator and expert on labour markets in the region. This, therefore, has widened the employment gap in favour of the existing urban environment prior to the pandemic.
The rate of economic participation, as mentioned above, is lower than pre-pandemic values in both areas, around -2 per percent.
Finally, due to the more intense recovery in employment than in labour supply compared to 2019, the unemployment rate dropped in both urban and rural areas by 2.5 percentage points and 1.7 percentage points, respectively.
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