LATIN AMERICA / THE CARIBBEAN
Labor market affected by economic downturn
Latinamerica Press 11/6/2015
Unfavorable prospects for growth in the region will be reflected in rising unemployment.
The Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO) forecast an increase in urban unemployment from 6.0 percent in 2014 to 6.6 percent this year.
In the first half of 2015, state ECLAC and the ILO in the report “The employment situation in Latin America and the Caribbean”, published on Oct. 27, “the employment rate recorded a new decline with respect to the same period last year. An increase in the number of people looking for work began to negatively affect the unemployment rate, which rose to an average of 6.5 percent in the first semester, compared with 6.2 percent in the same period of 2014.”
“The current regional trend towards economic deceleration is worrisome because it reduces room for making gains on the reduction of poverty and inequality, two of the region’s important achievements since the beginning of the last decade,” states the report.
According to ECLAC and the ILO, since 2012 the region has seen low economic growth rates. This year a negative growth of -0.3 is projected. In 2014 the regional average growth was measured at 1.1 percent, the lowest growth since 2009, according to ECLAC.
“Among the main factors behind the growth drop are a weak internal demand; a global environment marked by a low growth of the developed world; an important deceleration in emerging economies, especially China; the strengthening of the dollar and a growing volatility in financial markets; and an important fall in primary goods prices,” ECLAC said.
South America, specializing in production of primary goods (oil and minerals) and with increasing degree of trade integration with China, will experience the largest slowdown. ECLAC estimates that this year it will register at -1.3 percent. Mexico and Central America are expected to grow by 2.6 percent and the Caribbean at around 1.6 percent.
“In this harsher economic context, microenterprises and own-account work could again act as job-creators of last resort, but this would consist largely of low-productivity and poor-quality employment,” Alicia Bárcena, ECLAC’s Executive Secretary, and Jose Manuel Salazar, Director of the ILO Regional Office for Latin America and the Caribbean, stated in the publication’s prologue.
“Accordingly, the region needs to intensify efforts to remove obstacles and create a propitious environment, not only for the creation and survival of firms but also for their growth and development, so as to generate a production structure with a lower proportion of jobs in microenterprises and small businesses and weighted more towards medium-sized enterprises,” they added. “Although not all firms have the potential to jump to a higher productivity level, their growth can be fostered through technological upgrading, access to adequate financing, greater innovation, better market access, and a higher-skilled labor force”. —Latinamerica Press.
LATIN AMERICA / THE CARIBBEAN
Average urban unemployment rates
Trinidad and Tobago
Source: ECLAC/ILO Compartir