Address by Prime Minister Freundel Stuart

New report says labour conditions in the Caribbean continues to weaken

New report says labour conditions in the Caribbean continues to weaken
12 May
2017

A new report released by two United Nations agencies says that the labour conditions in Latin America and the Caribbean continue to weaken.

The report by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) indicates that the increase in average regional unemployment in 2016 was the biggest annual rise in two decades.

The average rate of urban unemployment in Latin America and the Caribbean will rise again in 2017 to 9.2 per cent, “in a year characterized by modest economic growth that will not be sufficient to counteract the labour market’s weak conditions,” according to the new edition of the joint publication, “ Employment Situation in Latin America and the Caribbean”.

ECLAC and ILO said the urban unemployment rate rose last year to 8.9 per cent from 7.3 per cent in 2015, marking the biggest annual rise in more than two decades, “which has been attributed to a deepening of the economic crisis as expressed in a second year of contraction of the Gross Domestic Product (GDP).”

In light of the modest regional economic growth of 1.1 per cent that ECLAC and the ILO estimate for the current year, they say “it is very likely that the labour market’s weak conditions will persist in 2017, particularly with regard to the creation of new jobs and to the traits of existing and future work opportunities.”

More specifically, they estimate a new, albeit smaller, rise of 0.3 percentage points in the regional urban unemployment rate, which would put the average for the year at around 9.2 percent, “mainly due to weakness in generating salaried work, which is seen causing the employment rate (the proportion of the working-age population that is employed) to fall again.”

“These labor trends give serious grounds for concern, given that employment is the master key to reducing the poverty and severe inequality that dog this region,” Alicia Bárcena, ECLAC’s executive secretary, and José Manuel Salazar, the ILO’s regional director, warned in the document’s prologue.

“In fact, the region’s progress in combating both poverty and inequality has already slowed. Efforts must therefore be redoubled to ‘promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’, as called for in [United Nations] Sustainable Development Goal 8.”

In 2016, ECLAC and ILO said 13 countries experienced an increase in the urban unemployment rate, while eight registered a decline or maintained the same level as in 2015.

“This performance contrasts with what was observed in 2015, when the unemployment rate rose in eight countries, while declining or holding steady in 13 others,” they said.

The report also recognizes an increase in self-employment which, above all in the context of weak salaried job creation, is characterized by low and unstable income.

“This implies a deterioration in the average quality of employment, which is reflected as well in the low (and in several cases negative) rates of employment growth recorded and in smaller wage increases,” it says.

The latest edition of Employment Situation in Latin America and the Caribbean also notes that a deterioration in labor conditions tends to affect, above all, groups that are vulnerable, which includes immigrants, on par with women and young people with low education levels.

Utilizing information from population censuses and household surveys, a general overview of immigrants’ labor insertion in countries of the region is presented, “which is an issue of growing relevance given that intraregional migration has acquired great importance as emigration to other regions decelerates,” the report says.

According to the document, it is calculated that 28.5 million people emigrated from their respective places of origin in the region around the year 2010 (4.8 percent of the total population), while the region’s countries had received more than 7.6 million people, which corresponds to 1.3 percent of its population.

The document distinguishes between countries based on the magnitude and characteristics of the immigration they receive.

More specifically, in those places with heavy recent migratory flows, immigrants have lower average income than natives, suffer high levels of labor informality and have significantly lower social security coverage than employed natives, especially migrant women, the report says.

According to ECLAC and ILO, the results of this research “underline the importance of strengthening mechanisms for labor integration, which necessitates incorporating a gender perspective.”

In this regard, the report also reviews the policies needed to foster the insertion of migrant workers in productive jobs and decent employment, as well as recent progress made on the international development agenda.

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