Informal employment and slavery-like work

The post-pandemic regional occupancy rate has shown signs of recovery, yet the situation remains complex in Latin America, with rates still lower than those seen in 2019. This disparity doesn’t necessarily indicate a lack of growth in informal employment; in fact, informal work remains prevalent across the region, varying depending on the country. 

Informality has become the norm rather than the exception, contributing significantly to the persistent issue of precarious employment at the regional level. Countries like Ecuador, Bolivia, Paraguay, and the Dominican Republic continue to grapple with high rates of informality, particularly among female workers.

Chart 4.4.2 Unemployment rate in young people under 15 to 24 years of age.

Latin America and the Caribbean (9 countries). Third quarter of 2022

source: Panorama Laboral, ILO, 2022, chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/—americas/—ro-lima/documents/publication/wcms_867497.pdf

However, there are exceptions to this trend. Uruguay, for instance, managed to reduce its informality rate even before the pandemic and has sustained this progress. Meanwhile, in Chile, the informality rate hasn’t surpassed pre-pandemic levels, despite population growth. These demographic shifts shows important transitions within the population, presenting both opportunities and social challenges, especially concerning labor markets.

The evolving labor landscape poses new challenges, with job seekers spending more time in the market and facing increasing demands for technological proficiency and lifelong learning. Despite being employed, many struggle to make ends meet, with incomes often only sufficient to cover basic necessities. This confluence of factors paints a troubling picture: a scenario where employment exists, yet poverty and destitution continue to rise concurrently.

According to the International Labour Organization (ILO), while the unemployment rate decreased to 7.2% in 2022, concerns persist regarding the quality of employment, exacerbated by inflation’s erosion of workers’ purchasing power. Latin America and the Caribbean are facing a multifaceted challenge, it grows into crises impacting the labor market, necessitating the implementation of policies of protections for workers.

The volatility of inflation further complicates the region, perpetuating a cycle of economic instability. The COVID pandemic promoted the participation of women and young people into the informal labor market, amplifying existing challenges. The phenomenon of the working poor, individuals living in poverty despite being employed, is on the rise as they face a significantly higher risk of poverty. This reveals the urgent need to address the quality of employment and the inadequacy of wages, which directly impact the well-being of workers and their families.

The pandemic catalyzed shifts in work patterns, with telecommuting emerging as a viable alternative. The adoption of hybrid work models is now irreversible, reflecting broader transformations in labor practices. Byung-Chul Han provided a systematic account of how and why we live in a “Society of Fatigue”: “Today, everyone is a self-exploiting worker in their own company. People are now master and slave in one”

Moreover, young people entering the labor market face distinct challenges, including high rates of informality and precarious employment. The regional informality rate among young people is 60%, higher than that recorded in adults 47%.

The digital divide between generations further complicates matters, as youth are expected to navigate an increasingly digitized landscape, presenting both opportunities and barriers in the job market. Christakis Nicholas analyzes how hyperconnected we are and debates about how the effects of technology influence society and describes that interactions are characterized by being rushed, unlimited working hours and contributing to moral degradation.

While 2022 brought relative economic stability to the region, with growth rates outpacing global averages, the persistence of structural issues remains concerning. The disproportionate growth of non-salaried positions compared to salaried ones underscores the precarious nature of employment, with self-employment often filling the void left by insufficient formal opportunities.éricas/20231220-el-fenómeno-del-trabajador-pobre-crece-en-latinoamérica-según-oit

  • Byung-Chul Han (2015) “Society of fatigue” 
  • Christakis Nicholas, (2008), “Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives — How Your Friends’ Friends’ Friends Affect Everything You Feel, Think, and Do”.

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