BRIDGETOWN, Barbados (CMC) — The unemployment rate in Latin America and the Caribbean (LAC) reached 8.1 per cent in 2016, the highest level in a decade, amid an economic contraction that has also affected the quality of employment, the International Labour Organisation (ILO) has said.

In its annual report on the region’s labour market, the ILO noted that the rate is 1.5 percentage points higher than in 2015, when it stood at 6.6 per cent, and it means that an estimated five million people joined the ranks of the unemployed.

It said the unemployment figure now stands at 25 million workers.

The report titled “2016 Labour Overview of Latin America and the Caribbean,” notes that the labour scenario in the region worsened in 2016.

“There has been a sharp increase in unemployment, informality is increasing and the quality of employment has deteriorated,” said the ILO Regional Director for Latin America and the Caribbean, José Manuel Salazar.

He said that by the end of the year, there was “a worrisome series of setbacks and negative impacts in multiple indicators.

“Although there are significant differences between countries and sub-regions, on average for the region this is the worst year in a decade, in terms of both economic growth and the unemployment rate”, the ILO Regional Director warned, adding “the economic contraction reduced job creation”.

He said of particular concern is that if forecasts of slow growth for 2017 hold true, unemployment will increase again next year to 8.4 per cent.

The ILO report notes that the increase in unemployment comes as an economic contraction of -0.6 per cent or -0.9 per cent is projected by the International Monetary Fund (IMF) and the Economics Commission for Latin America and the Caribbean (ECLAC) respectively, for 2016.

The average economic growth rate for the region reflects diverse situations, the report notes, because Central America, the Caribbean and Mexico are seeing positive economic growth rates, while there is a contraction in South America, especially in Brazil, where nearly 40 per cent of the region’s economically active population lives, and which has a strong impact on the average for South America and the region as a whole.

The ILO notes that although unemployment rates also reflect diverse national situations, in 2016 “a region-wide phenomenon was detected”, as the rate increased in 13 of the 19 countries with data available as of the third quarter of the year.