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April 13, 2016
Latin America is projected to be able to give a lesson to the European Union in terms of employment by hitting half of the EU’s unemployment rate the end of 2013. In less than a month the continent is on track to end the year with a 6.2% unemployment rate. This will be a record low for Latin America and the figures from the Economic Commission for Latin America & Caribbean (ECLAC) and the International Labour Organization (ILO) gives the region much to celebrate. In the third quarter of 2013, the region reached a 6.6% unemployment which can be held in stark contrast to the staggering 30% that can be seen in Spain, Portugal and Greece. The truly impressive fact is that the unemployment rate in Latin America is lower than the jobless rate of the United States which stands at 7.3%.
The first half of the year in Latin America was somewhat difficult due to the world economic crisis which saw both demand and prices fall across the region. However, Latin American countries managed to sustain an increase in the local purchasing power which in turn helped to balance out the issue. This rather moderate increase in household consumption paid dividends as the economy grew by 2.5% in comparison to the first half of 2012, according to ECLAC. The global economic slowdown had an impact on the region which recorded a reduction in the employment generation. Unlike in the EU, the slowdown in job creation did not translate into an increase in the unemployment rate as the growth of the labour force was also eased.
Ecuador ended the first half of 2013 with the lowest urban unemployment rate at 4.8% which was 0.2% less than the same period in 2012. The unemployment rate also decreased by 0.2% to 5.7% which Chile’s unemployment rate fell 0.4% to 6.2%. This fall could be seen across the region with Peru (6.1%), Venezuela (8.1%), Paraguay (8.2%) and Colombia (11.6%) all experiencing reduced rates of unemployment. Many of these countries have achieved a significant milestone in their history as the majority could probably not have imagined ever surpassing the EU in job rate. Nevertheless, not all countries experienced a fall in unemployment rate, with Argentina, Mexico and Uruguay all seeing albeit a moderate rise in unemployment, although none exceeded an increase of more than 0.5%.
The ECLAC and ILO reports also assessed the sustained reduction in the gender gap within labour force participation and found that the situation greatly varied depending on the country. When looking to the future, the report concluded that Latin American countries would need to strengthen their productivity and investment in order to meet the challenges of the continued international economic crisis. This would require a workforce that has abilities, skills and knowledge focused towards meeting business demands and therefore needs to develop further vocational training systems. Many countries seem to be doing so and are putting into action improvements of the quality of employment focusing on strong wage employment generation, significant increases in formal employment and the overall reduction of unemployment.
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