Biggest effects seen in second quarter of last year

A joint study by the Inter-American Development Bank (IDB) and the International Labour Organization (ILO) has assessed the unemployment situation in the Latin American and Caribbean region, finding that it soared by as much as 11 per cent last year.

This sharp rise was as a result of a marked drop in economic activity following the lockdown measures enforced in response to the COVID-19 pandemic. The IDB and ILO joint study highlighted that the pandemic was far more devastating for the region’s economy, which contracted 7.1 per cent in 2020, the biggest in a century.

The biggest effects were seen in the second quarter of last year. However, the study found that there was an uptick in economic activity, as workers began to return to the labour market in the third quarter of the year.

The tourism and transportation sectors were the worst victims of the crisis, both laid off millions of workers. The hotel business laid off 19.2 per cent of its staff, while the construction, trade and transportation sectors trimmed 11.7 per cent, 10.8 per cent and 9.2 per cent of their workforce, respectively.

These sectors collectively account for around 40 per cent of regional employment. At the same time, industry (8.6 per cent) and other services (7.5 per cent) also experienced contractions, while in the agricultural sector there were comparatively fewer job losses (2.4 per cent).

In their foreword to the report, Alicia Bárcena, executive secretary of  the Economic Commission for Latin America and the Caribbean, and Vinícius Pinheiro, the ILO’s regional director for Latin America and the Caribbean, stressed that, “given the depth of the impact of the crisis in the region’s labour markets in 2020, countries must implement policies that stimulate job creation, particularly among the most vulnerable groups such as young people and women”.

The two officials also emphasised the importance of regulating new forms of hiring through digital platforms.