Unemployment in Latin America and the Caribbean Not Expected to Be Above 7.0% in 2011

 Watch video "Employment, master key to equality" (in Spanish, subtitles in English)

(14 June 2011) The strong economic recovery of Latin America and the Caribbean will make it possible to bring down unemployment significantly from 7.3% in 2010 to between 6.7% and 7.0% in 2011, according to ECLAC and ILO.

In the latest edition of the joint publication The Employment Situation in Latin America and the Caribbean that was released today, the two United Nations agencies analyse labour trends in the region, as well as the countercyclical policies implemented by some countries during the recent international crisis.  They recognize that, in many cases, such policies helped to reduce economic vulnerability, which in turn facilitated a faster economic upturn.

In the foreword to the document, Alicia Bárcena, Executive Secretary of ECLAC, and Elizabeth Tinoco, ILO Regional Director for Latin America and the Caribbean, state the following "This crisis saw greater concern for maintaining people's employment and income levels.  Many of the measures adopted represented a way for increased fiscal spending to reach people as much as possible, which reflected a concern for equality".

These countercyclical policies involved expanding fiscal spending during the crisis and consisted in various measures such as infrastructure investment, emergency employment programmes, stimulation for social programmes and companies, among others.

According to the analysis, however, the policies implemented during the crisis were often the result of short-term reactions, rather than the consequence of an institutionalized countercyclical approach.

Bárcena and Tinoco said that, owing to the limited availability of fiscal resources, not all countries were in a position to implement strong countercyclical policies, while in other cases measures were introduced more as a reaction to a particular situation than as the result of a clearly defined and established strategy.

They recommend the following: "The challenge is to institutionalize a countercyclical approach throughout the economic cycle", adding that this would provide the capacity to respond immediately in the event of another crisis.

This new joint ECLAC-ILO publication also reviews the characteristics of the recovery of the region's labour markets. In 2010, the relatively strong regional recovery pushed up the urban employment rate by 0.8 percentage points to a record high of 55.2%.

At the regional level, the urban unemployment rate fell from 8.1% to 7.3% by the end of 2010, which signalled a return to pre-crisis levels. In absolute terms, in 2010 the number of employed people in the region's urban areas rose by 6.4 million, while the number of unemployed shrank by 1 million to stand at 17.1 million urban unemployed.

This year, the figure is expected to fall even more sharply and the unemployment rate might dip below 7%. The region's urban unemployment rate has been constantly falling since 2002, when it was above 11%. The two institutions do point out that the improvements to the unemployment rate have been uneven, and that it fell by more in South American countries than in the north of Latin America (and the Caribbean in particular).

The ECLAC-ILO bulletin states that many countries are showing signs of improvement in employment quality, and adds that "data on formal employment trends strongly reflect the recovery of economic activity". Indeed, in Brazil, Chile, Nicaragua and Uruguay, formal employment rose by around 6%, while in Costa Rica, Mexico, Panama and Peru it climbed by between 3% and 5%.

 Watch video: "Employment, master key to equality"

Any queries should be addressed to the ECLAC Public Information and Web Services Section. E-mail: dpisantiago@cepal.org; Tel.: (56 2) 210 2040.

Follow us on: Twitter , Facebook , Flickr  and YouTube.

Or the ILO press office. E-mail cordova@oit.org.pe; Tel.: +51989301246. ://www.oit.org.pe/