Latin America unemployment lowest in two decades

LIMA, Peru — Latin America and the Caribbean have confirmed their reputation as being well-positioned to weather the global recession with the news that urban unemployment in the region fell during 2011 to its lowest level since records began.

During the year, joblessness in the region’s towns and cities fell from 7.3 percent to 6.8 percent, according to the International Labour Organization, known as the ILO.

That is the lowest since the agency began compiling the statistic in 1990.

Read more: Poverty rates decline

Yet not everything was rosy on the employment front, the organization warned. Roughly half of all those jobs were “informal,” an entrenched problem in the region where governments have historically failed to control booming black markets.

The result is that on street corners from Patagonia to Jamaica, vendors hawk gum, pens, peanuts and other knickknacks while domestic and other employees frequently work at or below the minimum wage.

Few of them have basic labor rights, including sick leave, paid vacations, maternity leave or pensions. Meanwhile governments in the region typically miss out on significant tax revenues that would boost economic development or could be used for social spending.

Read more: The EU debt crisis comes to Latin America

Elizabeth Tinoco, the ILO’s regional director for Latin America and the Caribbean, said that the principal task for the region was to improve the quality of jobs rather than just the quantity.

“It is important to place employment as the priority objective of macroeconomic policies,” she added. “The generation of decent work is an essential component of growth, as well as an unrivaled tool in the fight against poverty and inequality.”

Yet formalizing many workers remains a major challenge in a region where tax-dodging is frequently a way of life and most employees earning just a few dollars a day are understandably reluctant to see the state take a portion of their wages.

On a more positive note, the urban unemployment rate in Latin America and the Caribbean will hold steady during 2012, the ILO predicted, a relatively favorable development given the dire predictions most experts are now making about the global economy.