2009 Labour Overview.

"This edition of Labour Overview 2009 is special because it runs through the complex arena of international crisis and its impact on employment in our region, and also contains some estimates of what might happen this year in the labour market". (Jean Maninat, Regional Director)

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Undoubtedly, 2009 will be remembered as the year we experienced a crisis. It has been a bitter pill for the economies of Latin America and the Caribbean, largely due to the impact of the crisis on the labour market.

The 2009 Labour Overview is special because it recounts the entire scenario of the global crisis and its effect on employment in our region. It also contains some forecasts on what may occur this year in the labour market.

The arrival of the crisis put an end to the five-year growth cycle during which the positive performance of Latin American and Caribbean economies also meant the continual decrease in regional urban unemployment, which declined from 11.4% in 2002 to 7.5% in 2008.

Undoubtedly, 2009 will be remembered as the year we experienced a crisis. It has been a bitter pill for the economies of Latin America and the Caribbean, largely due to the impact of the crisis on the labour market.

The 2009 Labour Overview is special because it recounts the entire scenario of the global crisis and its effect on employment in our region. It also contains some forecasts on what may occur this year in the labour market.

The arrival of the crisis put an end to the five-year growth cycle during which the positive performance of Latin American and Caribbean economies also meant the continual decrease in regional urban unemployment, which declined from 11.4% in 2002 to 7.5% in 2008.

In 2009, the unemployment rate rose to 8.4%. Although this increase was less than 1 percentage point, it meant that more than two million people joined the ranks of the unemployed. More than 18 million men and women have been unable to find work.

In light of the crisis, many other people had to settle for employment in the informal sector or for jobs not protected by labour legislation. Neither should we forget the loss of income and remunerations that always accompanies economic crises.

In other words, the crisis has increased the deficit of decent work in our region. The challenge is to overcome this deficit in the near future.

At the time this report was completed, the crisis appeared to have touched bottom; it is still not clear how strong the recovery will be. The ECLAC estimated a growth rate of approximately 4.1% for the Latin American and Caribbean region in 2010.

Growth at this rate will influence employment; however, there is a danger that its benefits will be quite limited. This report predicts that the unemployment rate will decrease, but only slightly, to 8.2% in 2010. Although this means that a positive trend will be resumed, it will not be enough to reduce the total number of unemployed persons given the annual increase in the labour force.

The 2009 Labour Overview recognizes that the crisis was not as severe as originally feared. Unemployment rates could have been higher. Nevertheless, the rate reached is largely attributed to the fact that many people withdrew from the labour market, discouraged by the lack of opportunities. Most of these were young people.

Also noteworthy was the positive impact of the policies applied by different governments of the region, which in many cases contributed to controlling the effects of the crisis on employment. Unlike previously, when governments immediately implemented adjustment policies, this time they opted for counter-cyclical policies to expand fiscal spending and social programmes.

The crisis underscored the need to shift the course of economic policy and to make the generation and quality of employment a fundamental objective, since this is the most effective way to improve the quality of life of individuals.

The ILO’s Global Jobs Pact proposes continuing down this path.

The approval of the ILO’s Global Jobs Pact in June 2009, with support from representatives of governments, workers and employers, provided an urgent, comprehensive response to the effects of the recession and will enable a strong recovery after the crisis.

The Pact is a commitment to the future. Its contents transcend the crisis; it is an essential tool for effectively bringing about the recovery. In addition, it is an important guide for policy design so that we do not limit ourselves to returning to where we were, to going back to the previous situation. 4 Foreword At the ILO, we believe there was another crisis before the current crisis, one of poverty, of informality and underemployment, of unsustainable development, of a deficit of decent work. We do not want
to go back there.

The key recommendation of the Global Pact is that employment, the work of individuals, and therefore the development of enterprises and of sources of employment, should be a core objective of countries’ economic policies.