Slow labor market recovery expected in Latin America, Caribbean

The pandemic has led to the biggest contraction in the region in the last 100 years, with 47 million jobs lost in Q2 2020.

The post-COVID-19 labor market recovery in Latin America and the Caribbean will be slow, according to the International Labor Organization (ILO) and the Economic Commission for Latin America and the Caribbean (ECLAC) in a new joint report. 

The report says that the COVID-19 pandemic has led to the biggest contraction in the last 100 years, with major economic, labor, social and production-related costs. The greatest effects were felt in the second quarter of the year, when it is estimated that approximately 47 million jobs were lost across the region. 

Many of those who lost their jobs were unable to find opportunities to swiftly re-enter the workforce or they withdrew from the labor market because restrictions on mobility prevented them from seeking employment. 

Returning to pre-pandemic economic activity levels will take several years, said the report. If the average growth rate in regional Gross Domestic Product (GDP) held steady at 3.0%, GDP would only return to 2019 levels in the year 2023. However, with the average growth rate seen over the last decade at 1.8%, GDP would not attain 2019 levels until 2025.

The joint report also indicates that women, young people and migrants have suffered the brunt of the crisis most acutely. The groups most affected have been those that cannot work from home because of their type of employment. 

They include women, who in addition to experiencing job losses have also had to leave the labor market to take care of their households; informal workers affected by prohibitions on people’s movements; sectors related to commerce, manufacturing, construction and services such as tourism and entertainment; young workers who are just joining the labor market; lower-skilled workers in more informal jobs that require physical proximity; and micro, small & medium enterprises. 

Image credit: Nelson Antoine / Shutterstock.com

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