Labour Overview (Panorama Laboral) has been circulating for 10 years now since its first issue in 1994. At that time, an effort with no precedent within the core of the ILO was proposed. This implied fund investment so as to generate and gather data, situate such data within a standardised framework, update and analyse them in a concise and reader-friendly publication. Looking back, we realise how much this publication has grown, matured, adapted to new challenges and, mainly, become a useful tool that offers information not only about the annual flow of the labour market but also about the broader framework of decent work in the region.

Low economic growth with no labour progress in the region
News from the ILO (Lima, January 2004).

Despite the end of the recessive cycle of 2002 and the signs of a modest economic recovery in 2003, Latin America continues to show high levels of unemployment, a decline in the quality of employment, an increase in informality in new job posts, a fall in real wages and a reduction in the productivity of its labour force.

This is confirmed by ILO report 2003 Labour Overview, which also says that nowadays 19 million urban workers are unemployed in Latin America and the Caribbean. "The average urban unemployment rate - according to the report - reached an 11 % in the three first quarters of 2003. This is slightly less than the figure observed in the same period during 2002 (11.2%). "However, even if employment has had a slight increase, the report warns that such employment shows poorer quality, that women unemployment tends to worsen and that almost one out of three young people is unemployed in Latin America".

"The grim picture painted by the results of 2003 - says Agustín Muñoz, Regional Director of ILO - confirms our long-standing concern for the performance of the development model applied since the beginning of the nineties, which has the characteristic of leaving aside the social effects of policies".

Through the analysis of the evolution of urban unemployment by countries, the report observes an heterogeneous situation where out of nine countries assessed during the three first quarters of 2003 in comparison with the same period in 2002, urban unemployment increases in Brazil (from 12 to 12.4%), in Ecuador (from 6.3 to 6.7%), in Mexico (from 2.8 to 3.2%), in Uruguay (from 16.5 to 17.4%) and in Venezuela (from 15.7 to 18.9%), while there is a decrease in Argentina (-5.9 per cent), Chile (-0.4), Colombia (-0.5), Costa Rica (-0.1), Panama (-0.3) and Peru (-0.3).

Unemployment still mainly affects women. Even in the countries where unemployment was reduced, that reduction was less for women than for men. Thus, in Argentina the decrease in the unemployment rate in the first half of 2003 compared to the same period in 2002, was higher for men (6.1 per cent) than for women (4.7 per cent); in Chile, the unemployment rate of men suffered a fall of 0.8 per cent between January and September 2003 while that of women remained the same; in Peru and Brazil, men unemployment rates remained the same while that of women reduced by 0.4 and 0.8 per cent respectively.

Youth unemployment increases in 6 countries of the region (Argentina, Brazil, Mexico, Chile, Uruguay and Venezuela) out of a total of 9 countries assessed (including Colombia, Costa Rica and Peru) until it doubles or nearly doubles the total unemployment rate. In some countries like Argentina and Chile, the youth unemployment rate increases, though total unemployment is reduced.

As the ILO report observes a reduction of -0.5 % in the average productivity of the region in the first three quarters of 2003, compared to a similar period in the past year, it reckons that this fall tends to suggest that most newly occupied workers have a low degree of productivity, which is reflected in a decline in the quality of employment, meaning that there appears to be more informality. In that sense, ILO's Panorama Laboral, which on this issue turns 10 years old, analyses the behaviour of the occupational structure in Latin America and the Caribbean during the last two five-year period and confirms the following:

• The increase in employment informality: out of ten newly generated jobs since 1990, approximately 7 have been informal;
• The tendency towards labour tertiarisation: 9.4 out of 10 newly created jobs since 1990 belong to the service sector;
• The persistence of labour precariousness: only 4 out of 10 new jobs have access to the benefits of social security and only 2 out of 10 people occupied in the informal sector have social protection.

"More than half of the labour force in Latin America - says Regional Director of ILO, Agustín Muñoz - faces the problems of unemployment and informality. The distributive inequity and the fact that more than 4 out of 10 Latin Americans do not earn enough income to meet their basic needs, has contributed to damage social cohesion and making the task of governing more difficult".

The ILO report also confirms a reduction in the purchasing power of the minimum wage in the region which decreased -1.6% average as a consequence of the low wage adjustments and the impact of inflation. Therefore, real minimum wages experience a dramatic fall in Venezuela (-15%) and Uruguay (-15%), decreasing in Bolivia (-0.8%), Ecuador (-3.9%), Mexico (-0.3%) and Peru (-1.95), increasing in Brazil (1%), Chile (0.9%) and Costa Rica (0.5%), while in Argentina and Colombia they remain almost the same. Regarding the average industrial wage, the region is experiencing an average decrease of -4.8%, mainly due to the falls in Argentina (-14%), Brazil (-5.9%), Ecuador (-5.2%), Uruguay (-14%) and Venezuela (-19.8%).

The ILO calls the attention on the influence that the increase in the inflation levels has on wage levels and it states that in the three first quarters of 2003 the average inflation in the region reached a 10.2% over 7.7% which was registered during a similar period in 2002, with a special incidence of the rates observed in Argentina (18.5%), Brazil (15.9%), Paraguay (16%), Uruguay (23.1%) and Venezuela (33.1%).

If we take a number of factors such as employment behaviour, income and productivity as indicators, the ILO report analyses the labour performance of the countries of the region in 2003 (January-September). In that sense, Chile, Costa Rica, El Salvador and Peru show substantial progress; Honduras and Argentina moderate progress; Bolivia, Colombia and Panama, stagnation; Brazil and Mexico, a moderate step back and Ecuador, Paraguay, Uruguay and Venezuela, a step back.

"To sum up - says the 2003 Labour Overview- although there is a certain degree of labour progress compared to the past year as a result of the incipient economic recovery, it has not been sufficiently spread throughout the countries so as to revert the important fall in employment that occurred in 2002 in the region".

The ILO suggests the following - among other proposals - with the aim of reducing what the report calls "decent work deficit":

• The application of macro-economic policies cushioning economic cycles and stabilising growth so as to achieve progress in the labour situation in the countries as well as the reduction of inequalities and poverty.
• Labour modernization based more on the increase of productivity than in diminishing labour costs. This implies placing the stress on the investment in training and technological innovation.
• The need to find a productive solution for the crises in the fields of micro and small enterprises and the informal economy, based on the development of the local market.
• Creating a strategy to expand the employability capacity and the provision of minimum social protection conditions.
• Setting off an integrating social dialogue between governments, employers and workers, together with the modernization of labour ministries and their technical capacity, as well as the strengthening of employers organizations and trade unions.

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