Nearshore Americas
Unemployment LatAm

LatAm Unemployment Soared to 11% in 2020

The formal unemployment rate in Latin America and the Caribbean jumped to 11% as a result of a sharp drop in economic activity following the lockdown measures enforced in response to the COVID-19 pandemic.

The pandemic was far more devastating for the region’s economy, which contracted 7.1 % in 2020, the biggest in a century, says a joint study by the Inter-American Development Bank (IDB) and the International Labour Organisation.

The biggest effects were seen in the second quarter of last year. However, the report noted that there was an uptick in economic activity as workers began to return to the labour market in the third quarter of the year.

The tourism and transportation sectors were the worst victims of the crisis, both laid off millions of workers.

The hotel business laid off 19.2% of its staff, while the construction, trade and transportation sectors trimmed 11.7%, 10.8% and 9.2% of their workforce, respectively. These sectors collectively account for around 40% of regional employment, the report noted.

At the same time, industry (8.6%) and other services (7.5%) also experienced contractions, while in the agricultural sector there were comparatively fewer job losses (2.4%).

“Given the depth of the impact of the crisis in the region’s labour markets in 2020, countries must implement policies that stimulate job creation, particularly among the most vulnerable groups such as young people and women,” Alicia Bárcena, ECLAC’s Executive Secretary, and Vinícius Pinheiro, the ILO’s Regional Director for Latin America and the Caribbean, stated in the publication’s foreword.

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The two officials also stressed the importance of regulating new forms of hiring through digital platforms.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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