Globe, Latin America, United Kingdom

Employment in Latin America vs. redistribution of wealth

Unemployment in the region increased for the third consecutive year in 2017, with more than 26 million people affected, according to a report by the International Labour Organization (ILO).

 

Masiel Fernández Bolaños

 

Havana (Prensa Latina) Reducing unemployment and improving the quality of employment are challenges for Latin America and the Caribbean in order to promote social and economic progress and to achieve more sustainable and inclusive models of development.

With regard to the 19th American Regional Meeting (RRA) of the ILO, which will take place from October 2 to 5 in Panama, the first of its kind in Central America, Prensa Latina spoke with Guillermo Andrés Alpízar, researcher at the Centre for Research on the World Economy and associate member of Cuba’s Academy of Sciences.

Among the main themes broached by the RRA will be the challenge of providing proper jobs in the region, particularly in Latin America and the Caribbean. How do you see the performance of the labour sector in our region, one of the most unequal on the planet?

Over recent years the region has experienced the transition from prosperity to crisis and although economic growth recovered in 2017 low growth of the Gross Domestic Product (GDP) and threats of a return to recession are still very much in evidence

This performance, essentially explained by the disappointing progress of the main export markets, as well as by the dynamics of capital inflow – among them the drop in direct foreign investment revenue – left a mark on the regional labour market.

In a few brief figures recently published by the Economic Commission for Latin America and the Caribbean (ECLAC), the magnitude of the impact is apparent: in 2017 the urban unemployment rate rose to 9.3%.

This is without considering the situation (which is usually worse) in the rural population where people are not usually described as ‘discouraged’ (in other words, not interested in working). With this result, there was a regression, if you will, of more than a decade in terms of the performance of this indicator.

If we analyse this statistic a little more closely, the particular case of Brazil, a very influential country in the region which entered a climate of economic, political and social instability, stands out. During the first quarter of 2018, a survey of 20 metropolitan areas showed that unemployment affected 14.8% of the working population.

Hidden within the averages, there are also deep social disparities that often go unnoticed when analysing the most general statistics.

Let us mention two examples. Firstly, Latin American women, as well as having responsibilities both at work and in the home and in addition to being subject to other problems such as receiving lower pay than men sometimes for the same work, also find It harder to find work in the first place.

Hence, the unemployment rate for women is always higher than the regional average. Secondly, there is a considerable mass of young people who although shocking find themselves forced to work and it is estimated that unemployment affects about one fifth of the total population between 15 and 24 years of age.

Both cases show the great social shortcomings which still remain in the region, where the crisis, managed with neoliberal methods, has merely exacerbated previously existing long-standing systemic problems, reflected in the jobs market by precarious or very causal work.

What do you think can be done regionally to achieve more sustainable and inclusive models for growth, with more and better jobs for the future?

Taking the current situation as our stating point, as economic conditions become more difficult, this provides the medium for precarious working conditions to thrive and hence negatively impact the lives of millions of workers who are dependent on their salaries. To understand the magnitude of what this represents, let us take into consideration the fact that, according to ECLAC estimates, approximately 80% of household income comes from wages in the region.

In the field of economic policy, the situation is quite unique, since the region is facing a crisis, and instead of opting to increase public spending as a way to compensate for the negative effects of this, it has embarked on the uncertain journey of adjustment, a process also described as ‘fiscal consolidation’.

In addition, another key variable in the medium and long terms must be added to a situation that is in itself quite complex: the current industrial revolution.

When talking about the future of employment in the region, you have to take into account the possible impact of technological change that will be brought about by increasing automation in the manufacturing industry and the substitution of human labour with machines. This is not science fiction, but a very real problem.

This means that employment in the region is subject to increasing risk; initial calculations of the possible impact are already being made and the figures are alarming. According to World Bank estimates, approximately 64% of the jobs in Argentina are liable to being automated, as well as 69% of jobs in Ecuador.

Social dialogue is considered essential for promoting social and economic progress: how should this tool be used to achieve these objectives in real terms and to ensure employment rights are respected?

At the beginning there has to be dialogue, but we must also be clear that we are faced by conflict concerning the redistribution of wealth, where there are often conflicting interests between workers and their employers. Therefore, it is always important to consider  what influential resources are being exploited, and in what sense, because what the experience of recent years has shown is that faced by an onslaught on the part of the owners of capital the capacity of workers to respond has been weakened, although this does not occur homogeneously across all countries in the region.

It is also important to consider that when talking about variables such as jobs and wages we are talking about one of the key issues for achieving prosperity in the long term.

A model of integration in the wider international economy – which locks the countries of the area into a vicious circle of detrimental trade, where Latin America and the Caribbean primarily offer relatively cheap goods/services such as raw materials or poorly paid labour – is being reinforced. (PL)

(Translated by Nigel Conibear – DipTrans IoLET MCIL – nigelconibear@gmail.com) – Photos: Pixabay

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