According to the 2017 Labour Overview Latin America and the Caribbean,  for the third consecutive year unemployment in the region has grown, and affected over 26 million people last year. The report points out that, despite this situation, there are signs of recovery in the labour market and a more positive evolution of these indicators is expected for 2018.

“The regional labour market seems to be going through a change of cycle, following a generalized deterioration period of the labour and social indicators. However, the improvement of the situation will depend on on the fulfilment of economic growth expectations”, said the ILO Director for Latin America and the Caribbean, José Manuel Salazar-Xirinachs.

The annual report highlights that there was a mixed performance of the main variables linked to the world of work.

The average unemployment rate of Latin America and the Caribbean grew from 7.9% in 2016 to 8.4%, a 0.5% increase. The total number of people looking for a job without getting one was of 26.4 million.

Nevertheless, ILO report states that the average was strongly influenced by the situation in Brazil, where nearly 40% of the regional workforce is located, and where the unemployment rate was close to 13.1% during the 3^rd quarter of 2017.

In addition, even though there was a slight improvement in the regional economic growth after a period of economic slowdown, it was not strong enough to change the trend of a labour market that is “laggard when there is a recovery”.

However, for 2018, as economic growth expectations reach 2% in the region, it is expected to have a stronger impact on the labour markets, and for the unemployment rate to go down for the first time in three years, reaching 8.1%.

In fact, by the end of 2017 there was a slight improvement of the occupation rate in the labour market, which makes it possible to expect a positive evolution for 2018. It is important to understand that this improvement stills is “slight and fragile”.

The report points out that unemployment grew in the Southern Cone, where the variation from year-to-year for the 3^rd quarter went from 10.7% to 11.9%. In the Andean countries, there was a slight reduction from 6.9% to 6.8%, in Central America and Mexico it went down from 4.5% to 4% and in the Caribbean the reduction was from 7.8% to 7.4%.

During 2017, unemployment grew in 9 out of 19 countries, which is another positive evolution when compared to 2016, when there was a rise of unemployment in 13 countries.

“In general terms, this 2017 Labour Overview shows the end of the generalized deterioration of the Latin American labour markets, and the beginning of what shall be a new era of improvements, should the economic growth expected for 2018 become real”, said Salazar.

Nevertheless, he stated that unemployment is just the tip of the iceberg when it comes to the functioning of labour markets. “There are other dimensions of employment that should addressed by countries in the region, such as the persistent gender inequality, the lack of employment opportunities for young people, and issues linked to employment quality that contribute to maintaining informality”, he said.

As regards women, the good news is that, for the first edition of the Labour Overview, female participation rate was over 50%, reaching 50.2%. This means that over 115 million women are part of the working population.

But, despite this positive evolution, the gender gap remains. The participation and occupation rates among women are still lower than among men, showing a 20% difference. Moreover, the unemployment rate among women, 10.4% by the 3^rd quarter, is still 1.4 times higher than among men.

“Labour markets in the region still are strongly segregated”, said Salazar.

The average youth unemployment rate went from 18.9% to 19.5% in 2017, which means that one out of five young persons could not get a job. According to estimations, this situation affects around 10 million youngsters.

As regards employment quality, ILO’s report states that there has been a weak creation of employment in the formal sector, while independent work has shown higher growth levels, usually linked to lower quality working conditions and informality.

When analyzing employment per sector, the manufacture sector showed a 1.9% growth, normally linked to formal working conditions.

In terms of wages, given a context of moderate growth and lower inflation, seven out of nine countries with available information showed an increase of real wages in the formal sector. The most remarkable increase was in the case of real minimum wages, with an average of 4.3% by the 3^rd quarter of 2017, way above the 2.3% registered by 2016.

The report includes an analysis on the “Evolution of wages in Latin America and the Caribbean 2005 – 2015”.

The research shows that during that decade:

• Real wages in Latin America raised 19.8%, or 1.8% per year.
•  In average, the real mínimum wage went up 42% in Latin America.
• Public sector employees accounted for 18% of the entire number of employees in 2015, while domestic work accounted for 8% and private employment 74%.

The report recommendations state that the region should grow 5% or 6%, a goal that can only be accomplished by dealing with the low productivity and lack of productive development and diversification gaps, while working on education, vocational training and infrastructure”.

“This is the only path towards sustained, inclusive and sustainable growth, with more and better jobs”, concluded the Regional Director of ILO.