ILO: 34 million jobs lost by the COVID-19 crisis in Latin America and the Caribbean

Lima, ILO, Oct 3: The pandemic has led to a drastic contraction in employment and income in the region, but signs of an early recovery suggest the situation could begin to improve in the coming weeks, International Labour Organization (ILO) reports said.

Food relief during the COVID-19 pandemic in Guatemala. Image credit: © amslerPIX

At least 34 million jobs in Latin America and the Caribbean have been lost due to the COVID-19 pandemic, according to a new report from the International Labour Organization.

Countries need to adopt immediate strategies to address the labour crisis, which, the report says, could widen existing inequalities in the region.

“We face an unprecedented challenge, that of rebuilding the region’s labour markets, which implies facing structural failures that have worsened with the pandemic, such as low productivity, high informality, and inequality of income and opportunities of decent work,” said Vinícius Pinheiro, Director of the ILO Regional Office for Latin America and the Caribbean.

The second edition of the Labour Overview in times of COVID-19: Impacts on the labour market and income in Latin America and the Caribbean warns of “the drastic contraction of employment, hours worked and income.”

“We face an unprecedented challenge, that of rebuilding the region’s labour markets, which implies facing structural failures that have worsened with the pandemic,” Vinícius Pinheiro, Director of the ILO Regional Office for Latin America and the Caribbean said

It says that during this crisis “34 million workers lost their jobs (some temporarily)”, according to available information from nine countries that represent more than 80 per cent of the economically active population of the region. The employment rate reached 51.1 per cent in the first quarter, a reduction of 5.4 percentage points compared to the data for the same period of the previous year, which represents “a historical minimum value.”

The report also highlights that as of the third quarter of 2020, levels of economic activity have slightly improved. Data reveals the beginning of a recovery in employment and a return of some workers to the labour force.

“Preliminary signs of recovery are positive news, but the impact of COVID-19 on work and business was enormous, and the road ahead is long. It is essential to re-launch the bases for the reactivation of the economy with health security, ensuring favourable conditions for the operation of businesses and for the creation of more and better jobs,” said Pinheiro.

The report shows that Latin America and the Caribbean is the region with the greatest contraction in working hours in the world, with an estimated loss of around 20.9 per cent for the first three quarters of 2020. This figure is almost double the global estimate of 11.7 per cent.

“Preliminary signs of recovery are positive news, but the impact of COVID-19 on work and business was enormous, and the road ahead is long,” Vinícius Pinheiro said.

Income from work contracted by 19.3 per cent, also well above the world rate of 10.7 per cent.

Given that labour income represents, on average, between 70 per cent and 90 per cent of total family income, these reductions have meant great losses for many households, with significant impacts on poverty levels, the report adds.

It also warns that the crisis could worsen inequalities that existed before the outbreak of the pandemic. The workers most affected by the crisis are among the poorest sectors of the population, those with informal jobs or in a situation of disadvantage. Women and young people (under 24) are particularly vulnerable.

To tackle the effects of the pandemic, countries in the region have adopted combinations of measures aimed at protecting jobs, income and companies. “The early adoption of strategies that continue to mitigate these impacts and that underpin the recovery will be key. It is also essential to strengthen labour institutions, particularly with regard to active labour market policies,” says the Overview.

“It is essential to strengthening the mechanisms of social dialogue for the conclusion of national pacts or agreements that point towards recovery with productive transformation, formalization, universalization of social protection and just transition towards more sustainable and inclusive development models,” added Pinheiro.

Published originally by the ILO

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