Labour markets in Latin America, the Caribbean improve over the last 30 years

but major gaps in productivity and informality persist

By Claudia Coenjaerts, Director a.i. of the International Labour Organization (ILO) Regional Office for Latin America and the Caribbean
IN Latin America and the Caribbean, 80 per cent of household income comes from the labour market.
It is therefore critical to be aware of the evolution of labour markets due to their immediate effects on the well-being of people. The International Labour Organization (ILO) has been reviewing this evolution for 30 years, observing how Latin America and the Caribbean have experienced external debt crises, natural disasters, hyperinflation, political instability, the ending of armed conflicts, waves of internal migration and, recently, social unrest.
During these thirty years, we lived through a first decade marked by recurring crises from 1994 to 2003, followed by another decade with high economic growth, briefly interrupted by the impact of the international financial crisis of 2008 to 2009. This last stage of economic growth led to Improvements in both the quantity and quality of jobs and labour income from 2004 to 2014.

This, in turn, offered an opportunity to drive improvements in the areas of productivity, employment and social protection.
The participation of women in the labour market increased, the educational level of workers and access to formal salaried employment grew, opportunities arose for young people in the region and a historic low in the unemployment rate was recorded.
However, the opportunities of that period were not fully exploited to generate a change in the productive paradigm.
The most recent years, from 2015 to 2023, have been marked by economic growth rates that are insufficient for the creation of formal employment, by the impact of the COVID-19 crisis, by the negative effects of environmental crises, by uncertainty generated by technological changes on the future of work and by less fiscal space to implement reforms and programmes.
We continue to be a region with stagnant productivity and informality that affects half of the working population.
We are a largely young region and youth’s perspectives on their future are less optimistic than those of youth ten years ago.
In this context, how can we move forward from the last three decades to achieve strong and sustainable improvements that close persistent gaps and address new challenges in the world of work?

The challenge of reducing informality requires an integrated policy approach, in line with ILO Recommendation 204, which considers macroeconomic policies focused on employment, boosting productivity at different levels, as well as regulatory improvements to generate an enabling business environment and compliance. ILO Recommendation 204 also promotes measures to extend social security protection of workers, complemented by the use of appropriate technology and analyses.
In this sense, the region also faces the double challenge of formulating policies that allow countries to take advantage of rapid technological changes, such as digitalisation or artificial intelligence, and the transition to environmentally sustainable societies and economies.

These changes, if accompanied by a coherent policy package, can benefit businesses while still protecting workers by facilitating adjustments in the labour market to mitigate initial job losses and promoting formal job creation through industrial policies, skills development and reskilling, and the strengthening of public employment services, among others.
This process must be accompanied by measures that strengthen the governance and institutions of the labour market, as well as social dialogue between actors in the world of work so that decent work deficits and the loss of jobs are avoided.

The discussion on the most effective policy responses requires evidence and the ILO regional report Labour Overview has contributed to this dialogue without interruption since its first edition in 1994.

These topics will be discussed at the ILO Regional Symposium “Three decades of performance in the world of work in Latin America and the Caribbean”, which will be held in Santiago, Chile on 15 and 16 November 2023.

In the midst of the complex demographic, economic, social and environmental dynamics that have marked the last three decades in Latin America and the Caribbean, the Labour Overview will continue to play a fundamental role in its task of providing solid evidence and guidance for the promotion of decent work and social justice throughout the region.

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