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Unemployment and inflation hit Latin America. Photo: Pixabay.

ILO forecasts slight employment increase in Latin America by 2023

The organization estimates it will grow only 0.9%.

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According to a global report on world labor market prospects recently presented by the International Labor Organization (ILO), after a period of regional growth in employment of 6.4% in 2021, and 4.9% in 2022, a sharp decline is expected in Latin America.

Gilbert F. Houngbo, ILO’s CEO, said:

The need to promote decent work and social justice is clear and pressing.

The report, which underlines that world employment could grow by only 1% in 2023 — a notable slowdown from the growth rate of 2.3% in 2022 — forecasts for Latin America show a small increase of 0.9 % in 2023, representing 2.9 million new jobs, and an increase of 1.4% for 2024, generating a further 4.6 million jobs.

The report also highlights that, with a figure of 22 million, there will be a stabilization of the current unemployment numbers in Latin America for 2023 and 2024.

“The current global economic slowdown is likely to force more workers to accept lower-quality jobs, poorly paid and lacking job security and social protection, thus accentuating inequalities exacerbated by the COVID-19 crisis,” said the ILO.

More figures

The report, which points to political uncertainties and inflation as the main causes of the phenomenon in the region, presents other figures that attract attention:

  • The unemployment rate will remain stable at 7% over the next two years, lower than the percentage prior to the pandemic (8% in 2019).
  • ILO calculates that in Latin America, 16.3% of the active population, about 57.1 million people, are unemployed.
  • Those part of the informal economy stands at 53.7% of the population.

Harsh outlook for women

“The situation of women and young people in the labor market is particularly adverse. Globally, the labor force participation rate for women reached 47.4% in 2022, compared with 72.3% for men. This difference of 24.9 percentage points implies that for every economically inactive man there are two women in the same situation,” highlighted the report.

For its part, the unemployment rate in the young population (between 15 and 24 years old) is three times higher than that of adults, where around 23.5% neither work, study, nor are part of any training program.

Global picture

Globally, the ILO forecasts an increase in unemployment, reaching a rate of 5.8%, which represents close to 208 million people, reversing the downward trend observed between 2020 and 2022.

Among the main causes of the downward trend are:

  • Inflation
  • Significant drops in income
  • New geopolitical tensions
  • The conflict in Ukraine
  • The uneven recovery after the pandemic
  • Persistent bottlenecks in global supply chains

“This expected moderate increase is largely due to the low supply of labor in high-income countries. This would reverse the downward trend in global unemployment recorded from 2020 to 2022. As a result, globally there will continue to be 16 million more unemployed people than in the reference period prior to the crisis (value compared to 2019),” added the report.

For his part, Houngbo added: "Overcoming all these challenges requires us to collaborate to facilitate the establishment of a new contract on a global scale that promotes social justice."

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