Informal employment. On January 16, ILO published the report “World Employment and Social Outlook: Trends 2023” in which it highlights the slowdown of economic growth in Latin America as a consequence of COVID-19. It also includes global inflation and the war in Ukraine as explanatory factors. Thus, the organization considers that regional workers will have incentives to accept jobs with shorter working hours, in the informal sector and poorly paid. For 2023 and 2024, the ILO expects GDP growth in the region to be 1% in 2023 and 1.5% in 2024. Among the public policy recommendations made by the international organization is the promotion of the business use of technological tools and professional training to increase the productivity of workers, using the necessary fiscal tools.
The document highlights that global external demand for raw materials began to erode in the second half of 2022 as world economic growth slows down and inflation remains stable. With Brazil and Mexico being major global commodity markets, their slowdown has decisively affected growth in Latin America and the Caribbean as a whole in 2022. This process could also continue in 2023, says the ILO report.
On employment issues, the report highlights that, although its growth reached 4.9% in 2022, with the slowdown in economic growth, employment will barely grow between 1 and 1.5% in 2023 and 2024 respectively. And as a consequence of the slowdown, the report mentions that many workers will have to accept lower quality jobs, often underpaid and without the necessary working hours. The report also states that as inflation could rise above wages, the cost-of-living crisis could increase the number of people living in poverty.
The ILO recommends strengthening public policies that enable the sustainable development of the business environment, with a focus on young women, as they were especially vulnerable to the COVID-19 quarantine restrictions. In addition, it recommends promoting policies that allow for sustainability in the production of goods and services, with the ultimate goal that human capital will benefit from increased productivity.
In turn, the ILO stresses that the good use of fiscal policies is the way to achieve inclusive productivity growth. To this end, the right balance must be found between reducing inequality and preserving productivity and long-term growth. It also notes that private investment in means of production, including technology, is needed, as well as sufficient investment in public infrastructure such as transportation and digital infrastructure.
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The report highlights that the participation of business as an active player in the formulation, coordination and enforcement of public policies is important. This participation can be carried out, in addition to specific investments, through active participation in agreements with the public sector through employment plans to insert the most vulnerable labor populations.