Latin America and the Caribbean could see a historic record number of unemployment as a result of the coronavirus pandemic, the International Labor Organization (ILO) warned in a new report published Wednesday.
“The unemployment rate could rise between 4 and 5 percentage points, bringing the number of unemployed in the region to a historical record of 41 million people. If the crisis worsens, the employment situation could worsen, amplifying social inequalities,” the report says.
Before the pandemic hit Latin America and the Caribbean, the unemployment rate in the region was 8.1%, or about 26 million people at the end of 2019, according to ILO.
ILO’s latest report analyzes data from the World Bank, which estimates a 7.2% drop in the region’s economic growth – leading to an 12.3% unemployment rate. The ILO also analyzed the latest numbers from the International Monetary Fund (IMF), which estimate an economic contraction of 9.4%, resulting in a 13% unemployment rate.
“In absolute numbers, these rates imply an increase in the number of people who are looking for a job and do not get it; from 26 million before the pandemic to 41 million in 2020,” ILO specialists explained during a virtual news conference on Wednesday.
ILO’s report says the majority of the workers in various economic sectors are now at a high risk of unemployment due to the pandemic. About 40% of people with a high risk of unemployment work in high risk economic sectors such as hospitality, food service, small businesses and manual labor, another 17% are in the medium to high risk sectors, and only 20% of the labor force is engaged in low risk economic activities such as those in government, education and health jobs.