Job creation will slow down in Latin America to 1% in 2023

Employment in Latin America and the Caribbean will face a slowdown scenario during the years 2023 and 2024 of 1% and 1.5%, respectively, caused mainly by a reduction in the growth rate of the Gross Domestic Product (GDP) of the region, which will make it difficult to create new jobs.

According to the report of the International Labor Organization (ILO) ‘Social and employment prospects in the world: trends 2023’, the employment generated in 2023 will only be enough for "make up for" the growth of the working-age population in the region.

Along these lines, he points out that the increases in employment will be "moderate" and they will be "in line" with the increase in the active population. Consequently, the employed population rate will remain close to 58% in 2022. This figure is an improvement "considerable" compared to the minimum of 2020 (53.1%), but it is still below pre-pandemic levels (58.5% in 2019).

Behind this weakening of the labor muscle in Latin America is the drop in external demand, which is affecting expectations in the region, which is seeing inflation holding up and GDP growth slowing down.

Greater informality

In this scenario, the ILO warns in its report that there is a risk "growing" of an increase in informal employment in the region, with adverse effects to a greater extent among women and young people.

In recent years the trend has been downward. However, a number of factors could lead to this increase in informality, such as the elimination or weakening of support policies and the creation of formal jobs.

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"The context of uncertainty threatens the creation of formal job opportunities, with the risk that the absence of decent work opportunities will lead to informal jobs becoming the default option", explains the organism.

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