Even before the corona crisis, the economic situation in many Latin American countries was difficult – it is all the harder now. 34 million people have lost their jobs as a result of the pandemic. More and more live in poverty.
At least 34 million people in Latin America and the Caribbean lost their jobs because of the corona pandemic in the first half of 2020. This emerges from a report that the International Labor Organization (ILO) presented in the Peruvian capital Lima.
The report is based on data from nine countries that together make up more than 80 percent of the region’s total population. The UN organization warned of an unprecedented crisis in the labor markets and "a drastic shrinkage of employment, working hours and income." At the beginning of August, the ILO had estimated the number of jobs lost in the region at 14 million.
Low productivity and moonlighting
The ILO director Vinícius Pinheiro, responsible for Latin America and the Caribbean, called the current trend "an unprecedented challenge." The affected countries should immediately develop strategies to address the problem. The region is struggling with structural issues such as low productivity, income inequality and a large proportion of people working under the authorities’ radar, Pinheiro said.
According to the report, Latin America and the Caribbean are the regions of the world with the largest percentage decreases in working hours and income. The employment rate – the share of the workforce in the population – fell to a "historic low" of 51.1 percent in the first quarter of this year. Compared to the first half of the previous year, this is a decrease of 5.4 percentage points in the region with around 600 million inhabitants.
It mainly affects young people and women
Some of the job losses are temporary. Initial information from the third quarter also indicated a recovery. However, the pandemic has exacerbated existing inequalities. The ILO said that this could continue in a recovery. "The formal work deficit will become even more apparent for certain work groups such as young people, women and adults with lower qualifications."
There are some countries in Latin America that have so far suffered most from the Corona crisis. Brazil and Mexico, for example, are among the four countries with the highest number of deaths. The nine countries with the most infections with the Sars-CoV-2 virus include Brazil, Colombia, Peru, Argentina and Mexico.
Argentina is sliding deeper into poverty
The statistics agency in Argentina, meanwhile, reported a sharp increase in poverty in the country on Wednesday. In the once rich state, 40.9 percent of the people now live below the poverty line. That is 5.5 percentage points more than in the first half of last year. According to the authority, 10.5 percent of people live in extreme poverty – 2.8 percentage points more than in the same period a year earlier.
In order to slow the spread of the corona virus, the government had already issued very strict exit restrictions in mid-March, which are still in place, at least in the greater Buenos Aires area. The tough restrictions also hit the economy, especially informal workers have not been able to do their jobs for months.
The economically hard hit South American country has been in recession since 2018. The inflation rate in the second largest economy in South America was 54 percent last year. The country suffers from a bloated state apparatus, low productivity in industry and a large black economy that deprives the state of much tax revenue.
With information from Ivo Marusczyk, ARD Studio Buenos Aires