If the joint Economic Commission projections for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) are anything to go by, the post-COVID-19 economy experience of Latin America and The Caribbean is likely to pose some of the toughest challenges and will require “macro operational policies… along with sector policies that would promote sustainable development with employment” to reduce the stress that may attend recovery.
In a joint Report published earlier this month, the two international agencies claim that post-COVID-19 labor market reactivity in the region is likely to be blurry and “it will be time-consuming for headline indicators The world of work returned to the levels seen before the health crisis. In addition, the report says, it will take even longer to achieve the targets set out in the Sustainable Development goals.
And the two international agencies say in a press release summarizing the contents of the report that trying to revitalize the economies of Latin America and the Caribbean must put women, young people and small businesses first.
The Report states that a return to pre-pandemic levels of economic activity will take many years and that this is bound to translate into a slow recovery in employment. Assuming the average growth in regional Gross Domestic Product (GDP) remains steady at 3.0%, overall GDP is unlikely to return to 2019 levels any time before 2023. “With the average rate seen over the past decade (1.8%), GDP would fall short of 2019 levels until 2025, ”says the joint statement issued by the two international agencies. And with the average rate noted over the last six years (0.4%), this could not be achieved in the next decade, ”he adds.
The ECLAC / ILO joint prognosis states that hopes for recovery within the stated timescale will depend on Latin America and the Caribbean’s willingness to develop “environmental policies that will drive jobs and growth, underpinned by operational fiscal policies which fosters employment, with labor intensive investment projects and a focus on environmental sustainability. “He added,” they must be accompanied by industrial and technological policies to build national productive capacities and increase competitiveness. “
Both agencies note that, in the meantime, finance and liquidity will need to be provided to micro-enterprises, SMEs with longer maturity and at lower cost.
And according to the joint ECLAC-ILO statement, “for a variety of reasons, women, young people and migrants are among those most affected by the health crisis.” Describing the impact of COVID-19 on the economies and labor markets of Latin America and the Caribbean as “unprecedented” the statement summarizing the key elements of the joint report states that this has led to “the largest contraction in the last 100 years , ”With large economic, labor, social and production costs.
Numbered in the report among those most affected by the pandemic are those who are unable to work from home due to their type of employment. “This includes women, who, in addition to experiencing job losses, have also had to leave the labor market to carry out home-related care and tasks; informal workers, affected by prohibitions on moving people and lower household ability to hire workers; sectors involved in commerce, manufacturing, construction and services (tourism and entertainment); young workers who have just entered the labor market, due to a lack of new job creation; lower skilled workers generally in more informal jobs that require physical intimacy; and MSMEs, ”the statement states.
And according to the Report, the biggest impacts were felt in the second quarter of the year, when it is estimated that around 47 million jobs were lost across the region compared to the previous year. Many of those who were made redundant were unable to find opportunities to quickly rejoin the workforce or withdraw from the labor market because mobility restrictions prevented them from seeking employment, ” add the joint statement.
“In terms of employment, the health crisis affected vulnerable groups most of all, deepening labor market inequality. Women have been most affected by job losses and the decline in labor market participation ”, the report said.
With regard to youth employment during the COVID-19 crisis, the statement notes that the pandemic has had a sudden impact on the employment of young people aged 15-24, especially those entering the labor market for the first time. He notes that data collected from four anonymous countries in the region shows that the fall in employment for people in this age range was -7.8 percentage points against the second quarter of 2019, while it was -7.3 percentage points at for those aged 25 and over. In addition, the increase in the youth unemployment rate in the second quarter of 2020 was greater than for adults (3.4 versus 1.8 percentage points), although their participation rate showed a larger decline (-8.7 versus -6.8 points) percentage). The statement adds that the impact of the employment crisis on young people has been even greater “due to fewer entry-level vacancies (fewer incorporations) and fewer temporary contract renewals and reduced hire following periods test. ”
And in light of the lack of learning likely to result from prolonged school closures worldwide, ECLAC and the ILO call for “promoting the integration of young people by combining classroom training with a subsequent phase of internships with companies” they say “should” be supplemented with financial subsidies to ensure youth attendance and participation as well as employment services to support their re-visit to the workforce. “It also states that there is a need for vocational training programs” that would facilitate the re-skilling of labor or the retraining of redundant young people “while digital technologies must be harnessed to enhance learning.