Economic downturn has begun to impact Latin America’s labor market, with wage growth decelerating across the region, according to the International Labor Organization (ILO).
Trends in the job market are unusual, the report said, adding that unemployment rate did not rise much although economies in the region created far fewer new jobs.
There are about 15 million people looking for jobs across the region. What is concerning is that 40 per cent of the unemployed in the region are youth. Although the participation of women in workplaces has risen, female employees account for less than 30 percent of the job market.
“There are warning signs,” said Elizabeth Tinoco, ILO Regional Director for Latin America and the Caribbean, pointing to the decreasing economic output in the region. “The concern is that we are creating fewer jobs.”
Unemployment in the region’s urban areas rose to 6.2 per cent for the third quarter of 2014. “We are talking about almost 15 million people unemployed,” she said.
The unusual unemployment trend, the report says, is a result of people dropping out of the labor market, which masks the effects of the fall in employment generation. According to the ILO, the urban unemployment rate may reach 6.3 per cent in 2015, which means that there will be some 500,000 more unemployed in the region.
“Many people who temporarily left the workforce in 2014 will return to search for a job next year, together with young people entering the labor market,” Tinoco said.
“So we have to face the huge challenge of rethinking strategies to push growth and a productive transformation of the economy to foster economic and social inclusion through the labor market.”