MercoPress. South Atlantic News Agency

Unemployment is going down in Latam but job-quality has become the challenge

Director General of the ILO Juan Somavia

Latin America and the Caribbean experienced rapid employment recovery in 2010 to pre-crisis levels, according to data provided by the International Labour Organisation (ILO). However, the quality of jobs now being offered to those made jobless in the contracted worldwide recession over the past two years is fast becoming a problem in itself.

“The fall in unemployment is good news and clearly demonstrates both the capacity of countries to tackle the crisis and the speed of recovery of their economies” according to Director General of the ILO Juan Somavia.

ILO estimates based on the most recent figures for the region indicate that the urban unemployment rate in Latin America and the Caribbean will be 7.4% by the end of 2010, below the level of 8.1% for 2009 — the year that was hardest hit by the crisis — and almost the same as the 2008 level of 7.3%.

“If we look beyond the unemployment rate, we face the challenge of improving productivity and wages, reducing informality, extending social protection coverage and tackling inequalities,” added Somavia. “Not only is it important to create more jobs, it is also important to ensure that these are quality jobs”.

ILO highlighted that the anti-crisis policies adopted by the various countries helped to ensure that the international crisis had a moderate impact on labour in Latam as a whole. However, Somavia said the political will to keep the priority objective of generating more and better jobs was being put to the test.

“The reality is that economies may improve, but unless people have decent work and sufficient incomes, recovery will be neither real nor sustainable. A demand for labour is needed in order to fuel growth,” added the ILO director general. “In order to achieve this, it is necessary to promote small enterprises, which are the greatest generators of jobs.”

Data collected by the ILO's Labour Analysis and Information System for Latin America and the Caribbean (SIALC) show that although the drop in urban unemployment benefited men and women alike, the latter continue to face a gender gap reflected in an unemployment rate that is 40% higher.

Also highlighted was the fall in the urban youth unemployment rate, from 17.4 to 16.3% in a group of seven countries for which data are available. This is more than twice the overall unemployment rate and about three times that of adults.

ILO figures available in five countries for the second half of 2010 showed an increase in formal sector employment of 4.6%. However, employment in informal sector business increased at a faster pace of 7.2%.

The report was released by Somavia during the recent 17th American Regional Meeting of the ILO, held last week in Chile.