Unemployment insurance in the Caribbean: An urgent call to protect workers and their families

A major social protection gap in the Caribbean is the protection of the unemployed, which is the least developed social security branch in the subregion, as recognized in the ILO Social Security (Minimum Standards) Convention No. 102.

News | 06 October 2021
by Ariel Pino, Social Protection and Occupational Safety and Health Specialist, ILO Caribbean

The COVID-19 pandemic has affected labour markets in many different ways. The prolonged economic slowdown and public health measures to contain the spread of the virus have affected the operations of businesses and pushed many workers out of the labour market, either as unemployed or inactive. Recent ILO estimates show the severity of the employment crisis and underscore the significant decent work deficits at global level. According to a regional ILO technical note published in April of this year, more than 26 million people lost their jobs during 2020 in Latin America and the Caribbean and the labour force contracted by more than 20 million people, on average, which is equivalent to an 80 per cent decrease in the employment rate.

Social protection systems play a crucial role in national efforts to leave no one behind. And crucially, it is in times of shocks when workers lose employment and households see their livelihoods dramatically affected. The impacts of shocks also have a disproportionate impact and affect the most at risk, including women in the informal economy. Notwithstanding the critical role of social protection, as recognized in the Sustainable Development Goals (SDGs) and as a fundamental human right, the pandemic has brought to the forefront the many gaps it has in terms of design, coverage, financing and administration.

A major social protection gap in the Caribbean is the protection of the unemployed, which is the least developed social security branch in the subregion, as recognized in the ILO Social Security (Minimum Standards) Convention No. 102. Unemployment insurance exists in Barbados and The Bahamas where protection is provided to workers in the formal sector who lost earnings and are unable to obtain suitable employment. The rest of the unemployed need to seek protection through non-contributory schemes or in the informal economy.

The employment crisis sparked by the pandemic has forced almost all Caribbean jurisdictions to implement emergency, temporary unemployment protection systems, even in Barbados and The Bahamas to extend coverage beyond the legal coverage of their schemes. As a result, more than 200,000 benefits have been paid by Governments to support the unemployed since early 2020, as highlighted in an ILO Caribbean rapid assessment of COVID-19 impact and policy responses at the end of the third quarter of 2020.

The challenge ahead is to make these temporary mechanisms a permanent feature of national social protection systems and an integral part of their social protection floors. As such, social protection will enhance a country’s capacity to respond to shocks and reduced the burden on social assistance programmes, which usually provide low levels of coverage, to protect the unemployed in times of shocks.

The ILO Office for the Caribbean is supporting its tripartite constituents in several countries towards that goal. Technical guidance is being provided to Dominica, Jamaica, Saint Lucia and Trinidad and Tobago in the design and cost assessment for the implementation of their national unemployment insurance schemes with a view to reduce the risk of poverty among workers and their families in times of crisis.