LIMA (ILO News) – The urban unemployment rate in Latin America and the Caribbean continued to fall in 2011, reaching a historic low of 6.8 per cent, announced the International Labour Organization (ILO) today, as it presented the latest version of its annual report, Labour Overview, in which it also warns of the need to address the challenges of improving job quality.
However, this downward trend could tail off in 2012 with a predicted slump in regional economic growth, so that the rate could remain at 6.8 per cent this year.
The 2011 Labour Overview for Latin America and the Caribbean also warns of the pressing need to tackle issues such as youth unemployment, persistent informality, the low level of social security coverage and the need to combat rural poverty though employment.
“There is no doubt that the unemployment trend has registered very positive developments over the last few years, and this should pave the way for more determined progress towards labour markets that create not only more jobs but better jobs,” said the ILO Regional Director for Latin America and the Caribbean, Elizabeth Tinoco, as she presented the annual report.
The Labour Overview puts the urban unemployment rate for the region as a whole at 7 per cent for the first ten months of 2011, with an estimated rate of 6.8 per cent for the 12-month period. In 2010, the rate had dropped to 7.3 per cent, which was considered an achievement, as it proved that the regional labour market was recovering from the aftermath of the international crisis when unemployment stood at 8.1 per cent.
The ILO Regional Director described the unemployment rate as “historic”, as it is the lowest it has been this century, which began with rates of over 10 per cent. It is also the lowest rate recorded since the current method for calculating regional unemployment was introduced in 1990.
However, Ms Tinoco recalled that behind the figures, there are real people, and that the current urban unemployment rate means that 15.4 million men and women still do not have jobs. On the other hand, not all countries have experienced the same drop in unemployment.
Published annually by the ILO Regional Office, the Labour Overview draws on the latest official statistics provided by Latin American and Caribbean countries.
The ILO representative also underscored the urgent need for measures to improve the youth employment situation. According to the Labour Overview, the urban youth unemployment rate (the 15 to 24 age group) stands at 14.9 per cent - more than double the general rate and triple that of adults, which is 5 per cent.
“Social and economic progress is unsustainable unless the policy challenge of creating better opportunities for young people is addressed,” said Tinoco.
The 2011 Labour Overview also highlights the persistence of the informal economy, with at least 50 per cent of the employed urban population in informal jobs, which are generally poorly paid, in precarious working conditions and without social protection or access to labour rights.
According to estimates based on data from 16 countries, of the 93 million people in an informal situation, 60 million work in the informal sector in production units that are not officially registered, 23 million have an informal job without social protection although they work in the formal sector, and 10 million are domestic workers.
In the case of young people, six out of ten of those who are employed only have access to informal jobs.
The 2011 Labour Overview highlights the following figures:
- Four out of ten urban workers do not pay social protection contributions for health care, and 43 per cent do not contribute to a pension fund.
- The female unemployment rate is 8.3 per cent, which is higher than the male rate of 5.9 per cent. The female participation rate stood at 49.5 per cent in 2011, which was still lower than the male rate of 71.3 per cent.
- The employment rate increased from 55.2 per cent in 2010 to 55.7 per cent in 2011, while the participation rate remained stable, rising from 59.8 per cent in 2010 to 59.9 per cent in 2011.
- Real minimum wages registered a marked increase of 4.5 per cent.
“It is important to place employment as a priority objective within macro-economic policies. The creation of decent jobs is essential to growth, as well as being a powerful means of fighting poverty and inequality,” said Tinoco.
She added that the need is all the more pressing in view of the economic uncertainty prevailing at the beginning of 2012 and the potential impact of another recession on the labour market.
“The region managed to recover from the 2008-09 crisis thanks to the benefits of a five-year cycle of economic growth, and by using counter-cyclical policies to protect jobs and incomes,” recalled Tinoco.
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