2015 Labour Overview

ILO: 1.7 million people joined the ranks of the unemployed in 2015 in Latin America and the Caribbean

The ILO’s 2015 Labour Overview indicates that the economic slowdown has caused a rise in unemployment, particularly among women and young people, and there are signs of increased informality. The situation is worrying and poses policy challenges to the countries of the region. Unemployment could rise again in 2016.

News | 10 December 2015
LIMA – In 2015, the unemployment rate in Latin America and the Caribbean increased for the first time in five years to 6.7 per cent, causing at least 1.7 million people to join the ranks of the unemployed, according to the ILO's annual report released today, in which the impact of the slowdown on economic growth in the labour market is recorded.

The 2015 Labour Overview of Latin America and the Caribbean warned of a "turnaround" in the employment indicators, with a deterioration in the employment situation of women and youth, and indications of rising informality through "increased generation of lower quality jobs."

"The cumulative effects of the economic downturn that began three or four years ago and deepened during 2015, can be described as a crisis in slow motion," said ILO Regional Director, Jose Manuel Salazar, introducing the report on Thursday in the Peruvian capital. "This situation is worrying and poses numerous policy challenges for the countries in the region."

Because of slow growth forecasts for the region remain in the coming years, the ILO estimated that in 2016 the average unemployment rate for Latin America and the Caribbean could increase further to 6.9 per cent.

Salazar said that in 2015, similar to the economic slowdown, the reduced employment generation has been seen at different rates across the countries in the region. In some countries the unemployment rate has even reduced. But at the regional level there are countries such as Brazil, which significantly contribute to an increase in the average rate.

Thus, the main rise in unemployment occurred in South America where it increased from 6.8 per cent to 7.6 per cent, and the Caribbean increased from 8.2 per cent to 8.5 per cent. However, a fall was recorded in Central America and Mexico, from 5.2 per cent to 4.8 per cent.

The average unemployment rate for the region rose from 6.2 per cent in 2014 to 6.7 per cent in 2015. From this we estimate that regionally, unemployment increased by 1.7 million and therefore "the total number of people affected by a lack of jobs in Latin American and Caribbean is around 19 million," said Salazar.

The Regional Director also commented on the quality of jobs. There are indications of a slowdown in wage growth and a reduction in the generation of wage and salaried work, with an increase in self-employment, which can be associated with poor working conditions.

"These are signs that there may be increasing informality, which according to the latest available data has reached 130 million workers," he added.

More than half of those newly unemployed are women. The unemployment rate of women has increased from 7.7 per cent in 2014 to 8.2 per cent in 2015, according to the ILO’s Labour Overview, equivalent to 1.4 times the rate of men.

The regional report explains that the rate of labour participation of women resumed an upward trend, but the employment rate was more moderate. "The unemployment rate can be attributed to the greater influx of women into the labour market," says the document.

Youth unemployment also increased, following several years of a decreasing rate, meaning that "the trend has changed" for this group as well. As is the case with the general employment rate, the youth unemployment rate varied between countries and an improvement has been observed in about half of the countries in the region. The average for Latin America and the Caribbean saw a rise from 14.5 per cent to 15.3 per cent.

"Unless policies are put in place to boost the quantity and quality of youth employment, the emerging economic situation could further aggravate this situation," warns the report.

The ILO’s Labour Overview states that in the short term, the situation of higher unemployment and informality should be managed with social and labour market policies specifically aimed at protecting jobs and incomes.

The Regional Director of the ILO warned however that there must also be measures to "address long-standing structural problems." He stated that "the slowdown is evidence once again that the countries of Latin America and the Caribbean continue to depend excessively on the dynamics of the global economy, and therefore still need to develop sources of economic growth from within the region."

"In the medium and longer term it is necessary to design and implement productive development policies to diversify production structures, promote increased productivity and business growth, creating more and better jobs to generate inclusive growth" said Jose Manuel Salazar.

He stressed that to achieve progress in this direction, it will be essential to promote social dialogue between governments, employers and workers in different countries. "Dialogued answers that are the product of a shared vision are needed," says the ILO’s 2015 Labour Overview.

In 2015, the Labour Overview, based on official sources from each country, now includes unemployment rates at the national level, which are available for most countries up until the third quarter of this year. Until last year, the available indicators were urban, mainly from the larger cities.