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Labour Inclusion is a Critical Factor for Reducing Inequality and Informality in Latin America and the Caribbean

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27 June 2023|Press Release

Today authorities and specialists inaugurated the Third Regional Seminar on Social Development, organized by ECLAC in collaboration with numerous institutions.

Labour inclusion policies, in combination with productive development and social protection policies, are key to reducing inequalities and the high degree of informality seen in Latin American and Caribbean countries, according to the authorities, scholars and international officials speaking at the inauguration of a three-day event that is being held at the main headquarters of the Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile.

The Third Regional Seminar on Social Development: Promoting labour inclusion as a way to overcome inequalities and informality in Latin America and the Caribbean is being organized by ECLAC in collaboration with the International Labour Organization (ILO), the Norwegian Ministry of Foreign Affairs, German Cooperation and the Ford Foundation.

Participating in the opening session were José Manuel Salazar-Xirinachs, ECLAC’s Executive Secretary (via video); Gilbert Houngbo, Director-General of the ILO (video); Fabio Bertranou, Director of the ILO’s Office for the Southern Cone of Latin America; Gundula Weitz, Head of the Latin America and Caribbean Division of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) (virtual); Jostein Leiro, Norway’s Ambassador to Chile; and Javier Ciurlizza, the Ford Foundation’s Director for the Andean Region.

“From ECLAC’s perspective, labour inclusion is a goal of inclusive social development that aims for all members of the workforce to be able to access decent jobs that would ensure adequate levels of pay and social protection coverage,” José Manuel Salazar-Xirinachs affirmed, warning that “women, young people, persons with disabilities, those living in poverty, Afro-descendants, Indigenous Peoples and other populations that are at the intersection of the axes that structure the social inequality matrix face greater obstacles and barriers to labour inclusion” in the region.

Labour inclusion, guided primarily by Labour Ministries but highly determined by productive development processes and policies, is an essential component of any strategy to tackle the challenging social and labour situation faced by Latin American and Caribbean countries, ECLAC’s highest authority underscored.

“In this regard, it will not be possible to create a better future for work without creating a better future for production, and vice versa. They are two sides of the same coin,” José Manuel Salazar-Xirinachs stated.

In his remarks, Gilbert Houngbo, the ILO’s Director-General, sustained that “unless concrete and coordinated actions at multiple levels are taken now, inequalities in the world of work will only worsen.”

“We need mid- and long-term policies that promote economic diversification, upgrading formal education, skill development, job matching, and anticipation to enhance workers’ employability and productivity. Additionally, sustainable social protection measures and strong labour institutions are crucial to creating a secure and fair playing field,” said Houngbo, who reaffirmed the ILO’s commitment to work on these areas in collaboration with ECLAC.

Meanwhile, Fabio Bertranou emphasized that “Latin America and the Caribbean is facing once again particular and difficult circumstances in terms of policies for decent work, which require a productive environment that promotes productivity and opportunities for sustainable development.” He agreed that the future of production and of work are two sides of the same coin, which means they must be addressed in an integrated way.

Gundula Weitz, of Germany’s BMZ, welcomed Germany’s long history of cooperation with ECLAC and the countries of Latin America and the Caribbean, and highlighted the regional seminar as a platform for exchanging experiences. In this regard, she lamented that the economic recovery process in Latin America and the Caribbean has been marked by the creation of informal jobs, in a region with more than 40% labour informality, she said.

Ambassador Jostein Leiro also pointed up the long-term cooperation that Norway has carried out with ECLAC and Latin American and Caribbean countries, and he asserted that “decent work for women and men is key to social and economic development, and represents the main gateway to equality, social integration and the end of poverty.”

Finally, Javier Ciurlizza of the Ford Foundation affirmed that “there have been many broken promises in Latin America and the Caribbean. One of them is undoubtedly related to labour inclusion. But it is clear that the aggregate of these broken promises erodes the credibility of models, erodes the credibility of systems and even erodes the belief system.”

After the seminar’s opening session, a high-level panel took place with remarks by Jeannette Jara, Minister of Labour and Social Security of Chile; Doris Zapata, Minister of Labour and Workforce Development of Panama; Colin E. Jordan, Minister of Labour, Social Security and Third Sector of Barbados (virtual); Raquel Kelly Olmos, Minister of Labour, Employment and Social Security of Argentina; Norman Dunn, Minister of Labour and Social Security of Jamaica; Pablo Mieres, Minister of Labour and Social Security of Uruguay (virtual); Quiahuitl Chávez, Undersecretary of Employment and Labour Productivity at the Secretariat of Labour and Social Welfare of Mexico (STPS); and Francisco Macena da Silva, Executive Secretary of the Ministry of Labour and Employment of Brazil (virtual). The panel included a presentation by Alberto Arenas de Mesa, Director of ECLAC’s Social Development Division.

The pandemic unleashed the biggest crisis that Latin America and the Caribbean’s labour markets had experienced since 1950, ECLAC emphasized. In 2020, during the pandemic, job creation fell by 8.2%, marking the only decline recorded in the previous 70 years. Between 2014 and 2023, the growth rate in the number of employed persons will be 1.26%, compared with 3.2% in the “lost decade” of the 1980s.

Between 2002 and 2014, the labour market was key to reducing poverty and inequality (among other factors), due to formalization processes, the United Nations regional commission indicates. Starting in 2015, that tendency began to change and it deteriorated significantly with the pandemic, pointing to a deepening of inequalities.

According to ECLAC’s data, in 2022, 81.7 million people between the ages of 15 and 59 (28%), in 9 of the region’s countries, were outside the labour market. Of that total, 57.1 million were women (70%).

In the context of the seminar, a book launch took place to unveil Inequalities and labour inclusion in the context of the future of work in Latin America, produced by ECLAC in the framework of an agreement with the Ford Foundation, which focuses on the challenges of labour inclusion in the context of the future of work for women, young people, Afro-descendants and indigenous peoples.

The publication proposes a comprehensive strategy with a territorial approach for addressing the challenge of labour inclusion, which would articulate macroeconomic and productive development efforts, labour and labour-market policies, and contributory and non-contributory social protection policies.

During the three-day event, participants will address issues such as labour informality, child labour, youth labour inclusion, the present and future of work, skills development for labour inclusion, and the articulation of labour policies and social protection.