BRIDGETOWN, Barbados, Thursday May 14, 2015 – The uninspiring economic outlook for this year will likely prompt a slight increase in the region’s unemployment rate, according to estimates released yesterday by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO).
In a new edition of their joint publication ‘Employment Situation in Latin America and the Caribbean’, both institutions of the United Nations (UN) indicate that the one per cent average expansion in economic activity forecast for the region will not be enough to reverse the deceleration process that began in 2011.
They projected that the unemployment rate would move to 6.2 per cent in 2015 from the 6 per cent registered in 2014.
“The stagnation of Gross Domestic Product (GDP) per capita should weaken labour demand and, therefore, the creation of salaried employment. For that reason, a decline in the region’s urban employment rate – which refers to the relationship between the employed population and the total number of people who are of working age – is forecast for a third consecutive year,” the UN organizations said.
The report said that on a regional level the decline in labour participation – the proportion of the working-age population that is active in the workforce, whether employed or unemployed – seen in 2014 is not expected to be repeated with the same intensity in 2015, which, coupled with a decrease in the employment rate, should lead to higher open unemployment, similar to the levels seen in 2013.
“The labour market situation in 2015 is not expected to be particularly conducive to progress in reducing poverty and inequality,” Alicia Bárcena, ECLAC’s Executive Secretary, and Elizabeth Tinoco, ILO Regional Director for Latin America and the Caribbean, stated in the document’s prologue.
Meantime, the report has indicated that during most of the last decade and at the beginning of this current decade, Latin America and the Caribbean made important advances in poverty reduction and income distribution in a global context characterized by growing inequality.
It said those improvements were due to the labour market’s positive trends, such as the robust creation of salaried employment and the reduction of gaps in labour income. Other contributing factors included public policies on labour matters (minimum wage, formalization, inspection) as well as non-labour matters (expansion of social protection systems and education).