Labour markets, worker protection and lifelong learning in a global economy: experiences and perspectives of Latin America and the Caribbean

Despite the expansion of the world economy in recent years, the employment situation remains uncertain, with a high percentage of the labour force unemployed or engaged in occupations that do not enable workers to escape from poverty. Recent growth rates in Latin America and the Caribbean, which have been relatively high compared with historical levels -albeit lower than those recorded in other regions- have had a favourable impact on job creation, employment rates and poverty; however, serious problems still persist, in our region as well, in terms of high unemployment, underemployment and job insecurity, and these situations are compounded by barriers to access to productive employment affecting specific sectors of the population, especially the least skilled, including youth and women.Sustained economic growth is known to be necessary, albeit insufficient, for generating high-quality employment and this, in turn, is recognized as the material base needed to ensure a decent life for the vast majority of the population and to build social cohesion in Latin America and the Caribbean.Labour-market trends reflect economic growth, which, according to its characteristics alters the extent and composition of labour demand. However, work must be considered as an input in the productive process, so that its features and the way in which it fits into this process have an impact on the characteristics of the latter.The nature of both links, between work and employment, on the one hand, and between the productive process and economic growth, on the other, is determined to a great extent by labour-market institutions, whose purpose, ultimately, is to generate quality employment. To this end, the two-fold objective of ensuring the efficient operation of the labour market and protecting the more vulnerable actors must be pursued.Like all institutions, labour-market institutions are products of history, the result of social, political, economic and cultural interactions in a given place and at a given time. The fulfilment of the above-mentioned objectives hinges mainly on the responses developed to meet the challenges posed by a particular economic, social, political and cultural context.As pointed out in this document, the current challenges stem from open, volatile economies which are radically different from the growth and development models that were current in the post-war era. In the face of stiff competition and constant technological change, the economies of the region are under pressure to increase their capacity for adjustment in,many areas, among them labour-market institutions. They must also work out a long-term development strategy to stimulate systemic competitiveness, and this calls for on-going education and training of the labour force. The former mechanisms for the protection of workers -centred on job security- and the old ways of consolidating their position in the labour market over time, precisely through seniority in a stable job position, have been declining. This brings to the fore the challenge to create worker protection mechanisms and promote career advancement in the context of present-day labour markets. Lastly, efforts must be made to expand the coverage of labour-market institutions in order to encompass broad segments of the labour force that do not enjoy their benefits or comply with their obligations.ECLAC, with support from the Government of Denmark, has prepared the study "Labour markets, worker protection and life-long learning in a global economy: experience and perspectives from Latin America and the Caribbean", which seeks to contribute to the debate in the countries of the region in the search for creative solutions to the problems -whether old or new- currently being faced in the region.This document, which consists of nine sections, gives a brief outline of the main findings of the study. Following a short introduction, section 2 describes the situation and recent labour-market trends in the region, which reflect the favourable macroeconomic context of recent years, although serious problems persist for a large proportion of the workforce. Section 3 looks at the characteristics of labour-market institutions and the three following sections sum up the changes introduced in recent years in the three pillars of labour-market institutionality: labour market regulation, unemployment protection and active labour-market policies. It should be noted that no single approach has been used to improve these institutions in the face of the above-mentioned challenges and that major deficiencies persist in all three areas. Section 7 discusses flexicurity, the approach used by the countries of the European Union, in a context that bears little resemblance to that of our region, to confront the challenges emerging in the current phase of world economic development. Section 8 analyses the hurdles that Latin American and Caribbean countries will need to overcome in order to change their institutions, bearing in mind the basic tenets of flexicurity, and puts forward proposals for reforming the three areas of labour institutionality. The final section presents some considerations relating to strategic aspects of a process of reforms negotiated in order to strengthen labour institutions in the countries of the region.One of the findings of the study is that, while countries face similar challenges, the solutions must be varied according to each country's peculiar characteristics, in order to reach a sufficiently broad consensus to give labour-market institutions legitimacy and, consequently, social sustain ability To that end, social dialogue -however complex and difficult, given the historical background of our countries- remains the most suitable avenue. In view of the region's past experience, this dialogue will only be successful if it is part of a process that generates mutual respect, recognition and trust. Consequently, while the reforms in the three areas of labour institutionality should be considered as complementary, the approach that promises to yield the greatest successes in terms of legitimacy and social sustainability is a gradual one. Lastly, labour-market institutions must be part of a more comprehensive effort to devise a development strategy for the countries of the region, including the definition of objectives relating to job creation and job quality. Labour-market institutions must contribute to the objectives thus defined.José Luis MachineaExecutive SecretaryEconomic Commission forLatin America and the Caribbean (ECLAC)