LATIN AMERICA / THE CARIBBEAN
Labor market policies must be reoriented
Latinamerica Press 6/30/2016
ILO study reveals that achievements in the quality of employment in last 15 years have begun to reverse.
The economic slowdown affecting the countries in the region following the drop in international prices of commodities is impacting the labor markets, said the International Labour Organization (ILO) in the presentation of the report “What works: Active labour market policies in Latin America and the Caribbean,” released on June 21 in Lima, Peru.
José Manuel Salazar, ILO’s Regional Director for Latin America and the Caribbean, said that “there is a difficult situation present in Latin America due to a drop of the GDP to -0.5 percent for the second consecutive year. The slowdown will continue to impact the labor markets in the region during 2016 and the coming years.”
According to the ILO study, the unemployment rate in the region rose from 6.4 percent in 2014 to 6.5 percent in 2015; this means that around 1.7 million people, more than half of them women, joined the ranks of the unemployed, while wage growth has stagnated leading to predictions that informality, or jobs with no social benefits, will intensify in the coming months. Inequalities have also increased in eight countries in the region and poverty reduction has also languished.
Despite some years of solid growth in which social progress and unemployment advanced, those achievements were not consolidated, thus revealing structural deficiencies. “Even with remarkable progress, the shift to a knowledge driven economy and one based on better quality jobs has not been completed,” the report warns.
One of the big problems is the high level of informality in the labor market in the region. “Almost 50 percent of the employed population is in a situation of informality,” said Salazar. “There is an underlying structural problem when the informality level is so high. The formalization of employment requires the formalization of enterprises, and cross-sectoral decision-making [by the government] would help the economy to gain back points.”
The document recommends the countries of the region “to carry out a ‘strategic reorientation’ of their labour market policies in order to increase productivity and to address rising unemployment and informality resulting from the economic slowdown,” emphasizing the Active Labour Market Policies (ALMPs).
The ALMPs are government programs that help people find sustainable quality employment through training, public promotion of employment, employment subsidies, support of self-employment and micro-entrepreneurship, and labor market services. The goal is to increase employment, reduce inequality, improve mobility and quality of employment, and reduce poverty.
In addition to preventing the current economic slowdown from becoming a structural stagnation, ALMPs ensure a connection between job seekers and employers and promote the creation of quality productive jobs. Also, they keep people connected with the job market, ensure a constant improvement of qualifications and limit the incidence of informality.
ALMPs “lay the foundation for a more productive and knowledge-based economy”, said the ILO . —Latinamerica Press.
LATIN AMERICA / THE CARIBBEAN
Unemployment rate 2015 (Percentages)
Saint Vincent and the Grenadines
Trinidad and Tobago
Latin America/The Caribbean
Source: ILO Compartir