LIMA (ILO News) - At a time when the countries of Latin America and the Caribbean are facing a situation marked by a rise in unemployment, an increase in poverty and a pronounced decline in social and labour conditions, the International Labour Organization (ILO) begins its XV ^th Regional Meeting of ILO member States in the Americas to seek a "productive solution" to the region's labour troubles.

The aim of this Meeting is to assess the social reality in the region and to encourage, as has been indicated in the report of the Director-General of the ILO, the Chilean Juan Somavia, entitled Globalization and decent work in the Americas ¹ , an examination of "a productive solution" allowing the region to overcome the new and serious economic crisis that is affecting the region.

The meeting in Lima takes place in a regional context of low economic growth, high unemployment, and growing informalization of the labour market. Urban unemployment in Latin America and the Caribbean rose in the third quarter of 2002 to 17 million, an average unemployment rate of 9.2 per cent that, according to the 2002 Labour Overview of the ILO ² , is the highest that has been registered in the region in the past 22 years.

The urban unemployment rate is higher than that for the same period last year and is also higher than that registered during previous periods of general recession such as the foreign debt crisis, the Mexican devaluation and the Asian crisis. The perspectives are not flattering as, according to the report, "the total urban unemployed will rise to 9.8 per cent, the worst in the region for 30 years. This represents about 18 million people".

The table on urban unemployment rates in the report shows that, for the 12 countries reviewed in the first three quarters of 2002 compared to the same period in 2001, unemployment has risen in Argentina (from 16.4 per cent to 21.5 per cent), Brazil (from 6.2 per cent to 7.3 per cent), Costa Rica (from 6.1 per cent to 6.8 per cent), Mexico (from 2.4 per cent to 2.8 per cent), Peru (from 9.4 per cent to 9.7 per cent), Uruguay (from 15.4 per cent to 16.5 per cent and Venezuela (from 13.9 per cent to 15.5 per cent), while it has decreased in Ecuador (by 2.1 per cent), Colombia (by 0.6 per cent), El Salvador (by 0.8 per cent), Panama (by 0.5 per cent) and Chile (by 0.2 per cent).

Decent work deficits

The more than 400 delegates, representatives of Governments and workers' and employers' organizations of 35 countries of the Americas, will meet in Lima between 10 and 13 December. They will consider issues such as the impact of globalization on the region, gender and discrimination, the social and labour dimension of regional integration and what the report describes as "decent work deficits", which include deficits in employment and incomes, social protection and social dialogue.

According to the report presented at the meeting, such deficits can be seen in the insufficient supply of jobs for women and men, inadequate social protection, denial of labour rights and failure of social dialogue. At the same time, the ILO calls attention to the "serious crisis affecting a number of countries in the region [that] requires the immediate application of emergency social policies to prevent an explosion of poverty, hunger and despair among millions of unemployed (Argentina and Colombia) and those displaced by violence (Colombia)".

According to Somavia, "We are faced with populations in despair, who cannot understand how their own countries can have come to such a pass and who in many cases feel themselves to be the true pariahs of globalization".

"Urban unemployment particularly affects women and young people. Unemployment among women is about 45 per cent higher than the overall or average unemployment rate, while youth unemployment is almost double this figure." Urban youth unemployment rose in seven of the nine countries reviewed in the Labour Overview, and in almost all of the countries was twice or nearly twice the national average rate. Between January and September 2002, more than one in every five young people was unemployed in Argentina, Chile, Colombia, Uruguay and Venezuela. .

To those people without jobs may be added those whose job is of inferior quality, with low levels of productivity and incomes. The vast majority of these people work in the informal or unstructured sector of the economy. ILO estimates suggest that approximately 47 per cent of the urban employed in Latin America work in the informal sector. "Generally speaking, about seven out of every ten people economically active in urban areas of Latin America do not have a job or have a poor quality job."

While unemployment rates in rural areas are perceptibly lower, the report highlights the poor quality of the bulk of jobs, "especially among small farmers, indigenous or otherwise, engaged in subsistence agriculture or livestock husbandry with little connection to the market".

With regard to wages and income from work, the report tells of a gradual recovery between 1990 and 2000. This can be seen in an increase in annual real wages of 1.8 per cent and in minimum wages of 0.9 per cent. "However, industrial wages are now equivalent in real terms to those of 1980, and minimum wages only 74 per cent of the minimum wage of 20 years ago."

"Whatever methodology is used to measure this", says Somavia, "the pattern of income distribution in Latin America is the most unequal in the world."

In referring to deficits in social protection, the report warns that two-thirds of the active population in the Latin American region is outside the social security system, whether health-care provision or pensions. The situation is particularly serious for economically active women, 80 per cent of whom are not protected by social security institutions, according to ILO estimates.

With respect to occupational accidents, the report warns that in Latin America and the Caribbean 27,000 people a year die as a result of accidents at the workplace. "This represents 13.5 for every 100,000 people employed."

The Director-General of the ILO regrets in his report that trade union membership fell during the past decade in the region by percentages ranging from 1 to 29 per cent depending on the country. This decline, according to the report, has many causes, from the exponential rise in the number of workers on short-term contracts to the increase of work in the informal sector. "All this", says Somavia, "[is] compounded by the harassment of the trade union movement and the violence to which it was subjected in some countries in the nineties, or the movement's own difficulties in modernizing and expanding its representation to the informal sector."

Conclusions

The report looks at some of the causes that have led to the crisis, many of them "closely linked to serious shortcomings in the functioning of democratic institutions and the spread of corruption to an extent never seen before and to a loss in confidence of society in the independence of those in power, their institutions and the judicial system - all of which should be worthy of their confidence".

In referring to the process of reform of the State and the privatization of assets or management of state enterprises or property that characterized the policies of the 1990s, the report indicates, with regard to the former "almost no one today is satisfied with the reform…some because they think it undermined the nature of the State, others because they think that the reform did not change the concept of the State, which, in their view, made it difficult for markets to function properly". With regard to the privatization of state enterprises, the report recognizes that in many cases, above all when the process was clear and transparent, this has been beneficial to the population. The report explains, however, that it is also true that "in many other cases the public did not see what the benefits of privatization were, since the services provided by the privatized firms were no better and prices even higher than before".

The ILO draws attention to the burden of foreign debt, a problem that has not been solved, to the point that, in some countries (the report cites Argentina as an example), the situation is getting to the point where it is "unsustainable". Moreover, it warns of the pre-eminence of macroeconomic stability policies in which subjects such as the size of the public debt or controlling inflation are emphasized and structural issues such as efficiency and competitiveness in industry are neglected. "Frequently, little attention is paid to fiscal and social costs incurred when these policies cause an increase in unemployment and underemployment."

"Employment", says Somavia, "is not a by-product of macroeconomic policies, let alone the subject of just another sectoral policy. Employment, i.e. generating productive work, must be a core goal of economic policy."

Faced with the seriousness of the economic crisis and the worsening of social and labour conditions in Latin America and the Caribbean, the Director-General of the ILO proposes, in his report, the need to strive for "a positive solution" that will allow the current deficits of decent work to be overcome and that will serve to encourage enterprise creation, increased productivity, job creation and growth in demand. The region, he says, "needs a productive response and resources. In other words, we need a solution that gives people opportunities to work and to consume".

The report of the Director-General also highlights the importance of social dialogue as "the principle source of governance of socio-economic change in the framework of globalization" and calls for a new model of development in Latin America and the Caribbean "with a view to finding and adopting measures not only to return to high and sustained economic growth, but also to incorporate social objectives into economic policy, democratize and modernize institutions, prevent corruption and violence and - the final goal - to achieve development with freedom, equity, security and human dignity".

1 Globalization and decent work in the Americas, Report of the Director-General, Fifteenth American Regional Meeting, Lima, December 2002. International Labour Office. ISBN: 92-2-113278-1. Price: 20 Swiss francs.

2 Document Panorama Laboral 2002 de América y el Caribe is available online at: www.oit.org.pe.