(6 June 2012) Labour markets in Latin America and the Caribbean continued recovering in 2011 and they are expected to maintain a positive tendency in 2012, having shown a decrease in urban unemployment of 6.5% - in spite of the uncertainty generated by the increasingly complex international economic situation, as reads an ECLAC and ILO joint report.
In the new edition of their joint publication The employment situation in Latin America and the Caribbean, published today, the Economic Commission for Latin American and the Caribbean (ECLAC) and the International Labor Organization (ILO) report that the urban unemployment rate decreased from 7.3% in 2010 to 6.7% in 2011, levels not seen since the beginning of the 1990s.
In 2012, ECLAC and ILO estimate regional economic growth in the region will be relatively lower than in 2011, amidst a world economy where major economic motors are currently experiencing a downturn and where uncertainty is high - especially concerning perspectives for the Eurozone.
Nevertheless, they foresee a new decrease in the unemployment rate of up to two tenths of a point (to 6.5%).
Both UN institutions add that the number of formal jobs including social protection increased and unemployment decreased, whereas salaries - both average and minimum - increased in real terms, yet modestly.
On the other hand, the Bulletin shows that there are still important gaps and serious professional integration problems in the labour markets - especially for women and the youth, who continue facing unfavorable unemployment levels and other job indicators.
Likewise, it states that there is a ongoing unfavorable redistribution of income with regard to the countries' gross domestic product (GDP), as during a period of relatively high economic growth between 2002 and 2008, 13 countries saw a reduction of wage participation in GDP, whereas it increased only in eight countries - out of a total of 21 countries with available information.
"The region needs to grow more and better. Productivity must grow at a steady pace, to serve as the basis for sustained improvements in the well-being of the populace and to narrow the gap between the economies of Latin America and the Caribbean and the more advanced ones.," state Alicia Bárcena, Executive Secretary of ECLAC and Elizabeth Tinoco, Regional Director of the ILO Office for the Americas in the document's prologue.
While the region achieved some progress in the period from 2002-2010 - showing a yearly increase in labour productivity of 1.5% - it is far behind other regions, such as Sub-Saharan Africa (+2.1%) and, especially, East Asia (8.3%, excluding Japan and South Korea), as indicates the study.
Besides, in most countries, salaries increased less than productivity. Therefore, the Executive Secretary of ECLAC and the Regional Director of ILO remark that it is imperative to reduce inequality. This is why reducing the productivity gap between more modern corporations and the large number of low-productivity enterprises together with the establishment of a link between productivity and salaries are urgent tasks.
"Therein lies a dual challenge that must be addressed: continue to increase productivity while enhancing the mechanisms for distributing gains in a way that will encourage investment and boost worker and household income," claimed Bárcena and Tinoco.
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