Current Labor Conditions
in the Hemisphere:
Present Challenges
XIII Inter-American Conference of
Ministers of Labor
Salvador de Bahía, Sept. 2003
Jürgen Weller, ECLAC
Issues
Generaltendencies on the labor
markets in LAC
Specific challenges
Areas of policy intervention
Latin America and the Caribbean:
Labour market participation and
employment
Evolution of the structure of
urban employment
50
(% of urban employment)
40 Urban Informal Sector Formal Sector
30
20
10
0
Indep.w orkers Household services Microenterprises Public Sector SM+L enterprises
1990 2000
Latin America and the Caribbean:
Economic growth and employment
Economic growth (%)
6 1,0
rate (ptos porcentuales)
Change of employment
5
4 0,5
3
0,0
2
1 -0,5
0
-1 -1,0
91
94
97
00
02
19
19
19
20
GDP 20
Employment rate
Specific challenges on the labor
markets - 1
Important challenges “at both
extremes”:
• Compete with quality and productivity:
growing demand for highly qualified
staff
• Weak demand for workers with low
formal education (especially women):
sector and technological changes
Specific challenges on the labor
markets - 2
Higher instability, less protection
• Macroeconomic volatility
• The challenges of open markets
• Less stable contractual relationsships
Specific challenges on the labor
markets - 3
Productive integration of youth
• Starting-point seems favorable
(demographics, education)
• But results cannot satisfy (youth
unemployment, informality)
• Impact of economic crisis
• Multiple negative consequences
Agents and relations on the labor
market
Public Sector
Labor Market
Institutions
Rights and duties Rights and duties
(influence productivity, (influence ability, income,
costs etc.) etc.)
Terms of employment relationsship
(formal, informal)
Labor demand, job creation
Enterprises Workers
Labor as a factor of production
Some origins of labor market
problems
General conditions: Adverse macroeconomic
or political environment => low growth, low
labor demand
Enterprises: Low productive development,
low competitiveness => low productivity, low
wages
Workers: Low level of education and ability
=> low productivity, low wages
Labor market instituciones: Disequilibrium
between objectives of efficiency and equity
=> rigidities, employment of low quality,
mistrust
Policy challenges:
Employment policy on the
macro level
Macroeconomic policy for long-term
growth and smoothening of volatility
Relative prices favorable for productive
development
=> Seek for coalition, not confrontation
with the Minister of Finance!
Policy challenges:
Employment policy on the
meso level
Long-range sector policies: education,
regional development, promotion of
productive activities
Labor demand incentives in specific
sectors
=> Macro conditions are fundamental, but
require complements
Policy challenges:
Labor market institutions
Re-regulate labor institutions amidst
tensions:
• Between flexibility and stability
• Between efficiency and protection
• Between costs and income
• Between internal and external (national
and supranational) regulations
=> No “first best” exists – need for a
negotiated, country specific search!
Policy challenges:
Labor market policies
Improve productivity: continuous
training
Improve employability, no discrimination
Improve integration of youth into the
labor market
Promotion of microenterprises
Unemployment insurance