— new ECLAC-ILO study

REGIONAL GDP in 2020 experienced a -7.1 per cent contraction, the biggest in a century, producing in turn a drop in employment and an increase in the unemployment rate, which reached 10.5 per cent on average that same year, ECLAC and the ILO have indicated in a new study.

The Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organisation (ILO) have launched Edition No. 24 of their joint publication, Employment Situation in Latin America and the Caribbean (June 2021) – now available online – which analyses the impact of the crisis prompted by COVID-19 on the main labour market indicators in 2020.

According to the document, the biggest effects were seen in the second quarter of last year, when governments implemented confinement measures and others aimed at containing the pandemic. These measures produced a sharp drop in economic activity, employment, and in the number of hours worked. Many workers, mainly informal ones, were unable to continue their productive tasks and had to withdraw from the market, which prevented them from earning incomes for their households and acting in a countercyclical way, as in previous crises. Furthermore, the suspension of care services and schools gave rise to a heavy workload inside homes, which is unequally distributed in general, overburdening women in particular.

Starting in the third quarter of the year, workers began returning to the labour market and a gradual increase in employment was observed. However, 2020 ended with lower levels of labour participation and employment and higher levels of unemployment than what had existed before the pandemic, a release said.

“Given the depth of the impact of the crisis in the Region’s labour markets in 2020, countries must implement policies that stimulate job creation, particularly among the most vulnerable groups such as young people and women,” Alicia Bárcena, ECLAC’s Executive Secretary, and Vinícius Pinheiro, the ILO’s Regional Director for Latin America and the Caribbean, stated in the publication’s foreword. The two officials also stressed the importance of regulating new forms of hiring through digital platforms.

According to the report, the contraction in employment in 2020 was much more pronounced in sectors such as the hotel business (19.2 per cent), construction (11.7 per cent), trade (10.8 per cent) and transportation (9.2 per cent), which together account for around 40 per cent of regional employment. At the same time, industry (8.6 per cent) and other services (7.5 per cent) also experienced contractions, while in the agricultural sector there were comparatively fewer job losses (2.4 per cent).

Both United Nations organisations emphasise that it is essential to think about strategies that would enable laying the foundations for a return to the job market with better labour conditions for all workers. This entails shoring up employment recovery in the most highly affected categories and sectors, improving institutional aspects regarding health and job safety, formalising workers, promoting women’s labour inclusion, and adequately regulating new work modalities.

In the current edition of the Employment Situation in Latin America and the Caribbean, ECLAC and the ILO also examine key aspects of decent work for workers mediated by digital platforms. During the pandemic, these workers constituted a very important source of employment due to the need to reduce personal contact and maintain the dispatch of essential goods.

However, evidence suggests that there is a high degree of precariousness in this work modality characterised by instability, long workdays, the absence of socio-labour protection, and the lack of options for dialogue and representation.

The report emphasises the need to design adequate regulatory frameworks to achieve the goal of establishing and protecting social and labour rights for these new and expanding work modalities.