Published On: Sat, Nov 10th, 2012

Unemployment in the Caribbean predicted to continue downward trend – UN

SANTIAGO, Chile, Saturday November 10, 2012 - Two United Nations agencies predict that the region's open urban unemployment rate will maintain its downward trend.

Launching their latest joint publication titled “ The Employment Situation in Latin America and the Caribbean”, the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO), said the region will end 2012 with a variation of 6.4 per cent, which is lower than the 6.7 per cent posted last year.

The agencies said labour markets in Latin America and the Caribbean were “fairly resilient” to the slowdown in the regional economy in the first half of 2012, “which bodes well for a positive outcome in this year's employment and unemployment indicators.

“The positive trend will be maintained, despite the slowing economic growth rate, which went from 4.3 percent in 2011 to an estimated 3.2 percent this year,” ECLAC and ILO said in a statement.

According to the publication, the labour market has been key in preventing an even greater slowdown in the economy, “as there was a surge in household purchasing power thanks to job creation and a rise in real wages”.

The document highlights an increase in the employment rate of 0.5 percentage points to 56 per cent in the first half of 2012, improvements in job quality through a three per cent expansion in formal waged employment covered by social security, and a three per cent rise in real wages during the same period.

Alicia Bárcena, executive secretary of ECLAC, and Elizabeth Tinoco, regional director of the ILO Office for Latin America and the Caribbean, say that “in the first half of 2012, many countries maintained the recent trend of improvements in job quality, characterized by buoyant generation of waged work, significant increases in formal employment and a reduction in under-employment.

“We now have a regional labour market with indicators that are in a better position than before the crisis,? they wrote in the publication.

While the regional prospects are positive, ECLAC and ILO point out that the performance of the region's countries will be uneven.

Bárcena and Tinoco, however, emphasized the situation of young people, who are facing obstacles in joining the labour market, despite the positive conditions in the market.

They said this result in high rates of unemployment, job insecurity and low incomes.

“This generates problems not only for the individuals and their families but also a burden on countries' future social and economic development. As we have observed in different parts of the world, this can generate considerable social and political conflict,” they added.

The new ECLAC-ILO document, therefore, dedicates much of its content to the processing of household surveys on changes in the employment situation of young people during the recent episodes of economic crisis and recovery.

According to the study, although young people suffered the impact of the international financial crisis in a similar way to adults, “the aggravating factor is that the former had a weaker starting position, with higher unemployment and job insecurity”.

Before the 2008-2009 crisis, the document says the unemployment rate among 15 to 24 year olds was between 2.3 and 5.5 times higher than the rate among adults aged 25 and above.

According to the publication, there remain structural problems “that have a negative effect on the labour market situation of young people, and, therefore, on their longer term life prospects and societies' potential for development”.

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