2021 will be the second consecutive year of crisis for the labor market, say ECLAC and ILO

The Economic Commission for Latin America and the Caribbean (Cepal) and the International Labor Organization (ILO) presented a new report in which they conclude that in 2021 the growth of the formal employment will close as the second year in a row with an unprecedented crisis in the working market, this as a consequence of the pandemic, of a minor economic growth, insufficient generation of formal employment compared to the informal one and the need to implement policies for the recovery of the labor force.

“2021 is expected to close with an economic growth of 5.9% for the region, which will not be enough to recover the level of the product or the level of employment registered in 2019. The labor markets will have faced the second year of an unprecedented crisis ”, Indicates the report 25 called“ Policies for the protection of the employment relationship and subsidies for hiring during the Covid-19 pandemic”.

ECLAC and ILO add that during the first semester of 2021 there is an increase in the labor participation rate (which reached 60.0%, that is, 2.7 percentage points below the levels of the same period of 2019) and a job recovery, although without reaching the levels observed prior to the pandemic (the occupancy rate reached 54.0%, still 3.4 percentage points below that observed in the same period of 2019). As a result, the unemployment rate has decreased slightly compared to the second quarter of 2020 but still remains 1.7 percentage points above the same quarter of 2019, reaching 10.1% on average.

A major impact on the labor market in Latin America It is due to high informality, since it is estimated that 56.4% of women and 54.6% of men in the region work in informal conditions.

For this reason, the governments of the region face the challenge of supporting the entry and labor reintegration of the most vulnerable segments of society —especially women and young people— and, at the same time, favoring the conditions for employment. decent job creation, especially between micro, small and medium enterprises (MSMEs).

Likewise, they indicate that in the medium term, it will be necessary to implement reforms that allow progress towards more resilient labor markets, accompanying reactivation measures with programs to favor the transition from informality to employment. labor formality, along with a redesign of the social protection.