SANTIAGO, Chile (ILO Online) - Despite a modest economic recovery over the past year, persistently high unemployment continues to weigh heavily on Latin American and Caribbean economies, the ILO says in the latest edition of Panorama Laboral, its annual employment review for the region.
The report says the high level of unemployment, coupled with poor quality jobs, falling real wages and losses in productivity pose a challenge to the region of making the creation of decent work the central pillar of development.
"The current model of globalization actually devalues work," says Juan Somavia, Director-General of the ILO, "with all the consequences for individuals, families and societies."
"We have to work for a different, more just and equitable form of globalization", says Mr. Somavia, adding that governments, employers and workers need to foster "adequate political instruments to give employment the central role it should play in modern democracies."
The Director-General added that unemployment is "the main political problem of our time".
Panorama Laboral is the first of a series of reports to be issued in early 2004 evaluating the global employment picture and the impact of globalization on jobs and peoples' livelihoods. The ILO's annual "Global Employment Trends" is to be issued in late January, followed by the report of the World Commission on the Social Dimension of Globalization which is slated for release in February.
Latin American, Caribbean highlights
According to Panorama Laboral, 19 million workers were unable to find work in 2003 despite regional economic growth of 1.5 per cent of the GDP. The report said labour market performance was weak during the past year, with unemployment reaching 10.7 per cent - or nearly the same as in 2002 when it was pegged at 10.8 per cent. What is more, the report also said that even an accelerated growth rate of 3.5 per cent in 2004 would fail to reduce unemployment significantly.
Other highlights of Panorama Laboral for 2003 were:
- The purchasing power of minimum wages lost 1.6 per cent of its value, while wages in the manufacturing sector declined by an average of 4.8 per cent and average productivity of workers declined by 0.5 per cent;
- Four 4 out of 10 Latin Americans had an insufficient income to satisfy their basic needs, while since 1990, 7 out of 10 new jobs have been created in the informal economy;
- Women and youth were particularly hard hit by the lack of jobs, with women suffering greater job losses than men as unemployment rose, and one out of three youths is out of work in some countries.
How to respond?
Panorama Laboral proposes a series of political measures designed to promote the ILO's decent work agenda, saying that the creation of more and better jobs requires the active involvement of political and social actors.
A first step would be the application of "macroeconomic policies cushioning economic cycles and stabilizing growth", the report says, adding that this would imply a fiscal policy favouring structural balances to interim solutions and taking account of the social and labour dimension. The report highlights the need for "sustainable macroeconomics".
The ILO also recommends a modernization of the labour market based more on productivity than diminishing cost; a productive solution to the crisis of micro and small enterprises and the informal sector; and strengthening labour and social protection to reduce vulnerability.
To find the necessary consensus on these matters, the report insists on the essential role of social dialogue between governments, employers and workers and the need to strengthen it.
Mr. Somavia says fixing the regional job market requires the creation of decent jobs which correspond to the aspirations of people.
"Obviously no strategy can overcome the poverty of 220 million people in Latin America and the Caribbean if it is not based on the creation of quality jobs and more and better enterprises capable of generating employment", he said.
* For more information, see Panorama Laboral 2003, América Latina y el Caribe. Oficina Internacional del Trabajo (Spanish only).