The International Labour Organization (ILO) has warned of the need to adopt immediate strategies to face the labour crisis caused by COVID-19, which has led to the loss of at least 34 million jobs in Latin America and the Caribbean. The situation could generate an amplification of inequalities in the region even as early indications of recovery have been observed in recent weeks.

“We face an unprecedented challenge, that of rebuilding the region’s labour markets, which implies facing structural failures that have worsened with the pandemic, such as low productivity, high informality, and inequality of income and opportunities of decent work,” said Vinícius Pinheiro, director of the ILO regional office for Latin America and the Caribbean.

During a press conference on Wednesday 9September 30), the ILO released the second edition of its ‘Labour Overview in times of COVID-19: Impacts on the labour market and income in Latin America and the Caribbean’, in which it warns of drastic contraction of employment and income.

The report highlighted that as of the third quarter of 2020, a recovery in the levels of economic activity is detected and the first data reveal a beginning of recovery in employment and a return to the labour force.

“Preliminary signs of recovery are positive news, but the impact of COVID-19 on work and business was enormous, and the road ahead is long. It is essential to relaunch the bases for the reactivation of the economy with health security, ensuring favourable conditions for the operation of businesses and for the creation of more and better jobs,” said Pinheiro.

“It is essential to strengthen the mechanisms of social dialogue for the conclusion of national pacts or agreements that point towards a recovery with productive transformation, formalisation, universalisation of social protection and just transition towards more sustainable and inclusive development models,” he continued.

The Labour Overview further indicated that the employment rate of the region reached 51.1 per cent in the first quarter, representing a strong reduction of 5.4 percentage points compared to the data for the same period of the previous year, according to available information from nine countries that represent more than 80 per cent of the economically active population of the region.

On the other hand, the report warned that the crisis would be amplifying the high levels of inequality that existed before the outbreak of the pandemic.

The workers most affected by the crisis are among the poorest sectors of the population, with informal jobs or in a situation of disadvantage and vulnerability.

The report noted that countries in the region have adopted combinations of measures aimed at protecting jobs, income and companies after the COVID-19 crisis broke out. But at the same time it pointed out the unprecedented magnitude of the economic recession being faced with an extension that will necessitate a virtual reconstruction of the labour markets.

“The early adoption of strategies that continue to mitigate these impacts and that underpin the recovery will be key. It is also essential to strengthen labour institutions, particularly with regard to active labour market policies,” the report stated. “The crisis opens the opportunity to restructure labour and social protection institutions… as well as structuring a comprehensive employment policy that accompanies or is part of the economic recovery strategy.”