In 2015, the unemployment rate in Latin America and the Caribbean increased for the first time in five years to 6.7 per cent, causing at least 1.7 million people to join the ranks of the unemployed, according to the International Labour Organisation (ILO)’s annual report, in which the impact of the slowdown on economic growth in the labour market is recorded.
The 2015 Labour Overview of Latin America and the Caribbean warned of a “turnaround” in the employment indicators, with a deterioration in the employment situation of women and youth, and indications of rising informality through “increased generation of lower quality jobs.”
“The cumulative effects of the economic downturn that began three or four years ago and deepened during 2015, can be described as a crisis in slow motion,” said ILO regional director, Jose Manuel Salazar. “This situation is worrying and poses numerous policy challenges for the countries in the region.”
Because of slow growth forecasts for the region remain in the coming years, the ILO estimated that in 2016 the average unemployment rate for Latin America and the Caribbean could increase further to 6.9 per cent.
Salazar said that in 2015, similar to the economic slowdown, the reduced employment generation has been seen at different rates across the countries in the region. In some countries the unemployment rate has even reduced. But at the regional level there are countries such as Brazil, which significantly contribute to an increase in the average rate.
Thus, the main rise in unemployment occurred in South America where it increased from 6.8 per cent to 7.6 per cent, and the Caribbean increased from 8.2 per cent to 8.5 per cent. However, a fall was recorded in Central America and Mexico, from 5.2 per cent to 4.8 per cent.
“The average unemployment rate for the region rose from 6.2 per cent in 2014 to 6.7 per cent in 2015. From this we estimate that regionally, unemployment increased by 1.7 million and therefore “the total number of people affected by a lack of jobs in Latin American and Caribbean is around 19 million,” said Salazar.
He also commented on the quality of jobs. There are indications of a slowdown in wage growth and a reduction in the generation of wage and salaried work, with an increase in self-employment, which can be associated with poor working conditions.
“These are signs that there may be increasing informality, which according to the latest available data has reached 130 million workers,” Salazar added.
More than half of those newly unemployed are women. The unemployment rate of women has increased from 7.7 per cent in 2014 to 8.2 per cent in 2015, according to the ILO’s Labour Overview, equivalent to 1.4 times the rate of men.
The regional report explains that the rate of labour participation of women resumed an upward trend, but the employment rate was more moderate. “The unemployment rate can be attributed to the greater influx of women into the labour market,” says the document.
Youth unemployment also increased, following several years of a decreasing rate, meaning that “the trend has changed” for this group as well. As is the case with the general employment rate, the youth unemployment rate varied between countries and an improvement has been observed in about half of the countries in the region.
The average for Latin America and the Caribbean saw a rise from 14.5 per cent to 15.3 per cent. “Unless policies are put in place to boost the quantity and quality of youth employment, the emerging economic situation could further aggravate this situation,” warns the report.