Inclusive social development: The next generation of policies for overcoming poverty and reducing inequality in Latin America and the Caribbean

Inclusive social development: the next generation of policies for overcoming poverty...
Also during the 1990s, there was a significant increase in labour force participation rates, caused by the large
increase in the numbers of women in the workforce (from 41% in 1990 to 50% in 2002) and, to a lesser extent,
of young people (from 53% to 56% over the same period); this can be seen in figure 1.13.B. This increase in the
workforce far outstripped the economies’ capacity to create jobs; as a result, in spite of the cycles of clear economic
expansion, unemployment rates continued to increase or failed to report significant reductions. Unemployment rose
much more sharply among young people, with the rate tripling the rate for mature adults, in a context in which wage
levels were declining in relative terms (ECLAC/OIJ, 2004).
The same period also saw increased job creation in low-productivity sectors and the new jobs created, particularly
the worst quality ones, were largely concentrated in the services sector. One of the consequences of the general easing
of labour market conditions was increased precariousness in employment and greater informality.
In the 1990s, following a severe drop in the 1980s, real wages recovered and increased at a rate close to that of
per capita GDP growth before returning, in 1999, to their 1980 levels. Minimum wages, however, did not experience
any significant increase and grew more slowly than per capita GDP. Between 1990 and 2002, both indicators increased
at a rate substantially lower than economic growth: 15 real wages (simple average for 14 countries) increased by 21%
and minimum wages rose by 14%; consequently, by 2002, minimum wages were worth only 79% of their early
1980s value (see figure I.14).
250
Figure I.14
Latin America and the Caribbean (14 countries): minimum wage, real wage, a
GDP and per capita GDP, 1980-2014
(Index: 1990=100)
200
150
100
50
0
Chapter I
1980
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Real minimum wage
Per capita GDP
Average real wage
GDP
Source: International Labour Organization (ILO), Labour Overview, Lima, Regional Office for Latin America and the Caribbean, various years; and World Bank, World
Development Indicators.
a
Up to the year 2000, the wage index corresponds to industry. Both wage indexes are simple averages for the countries.
As of 2003, however, the trend inverted. Sustained growth in GDP and per capita GDP (with the exception
of 2009) was accompanied by a favourable evolution of the main labour market indicators. The unemployment rate
in the region’s countries fell from 11.2% in 2002 to 6.0% in 2014 (see, again, figure I.13.A). The overall employment
rate rose from 52% to 57% over that period, on account of the continuing upward trend in female participation
(although it had begun to stagnate as of 2006), lower unemployment rates and the slow but progressive withdrawal
from the workforce of some of the youngest segments of the population, which began in 2005 and was associated with
increased numbers remaining in secondary school and an expansion in the availability of post-secondary education.
The growth in total employment in the region translated into an increase in the proportions of salaried workers
(from 54.4% to 58.8% between 2002 and 2013) and of employers (4.6% to 5.2%) in the total workforce; at the
same time, it caused a drop in the percentages of independent workers and unpaid workers, from a share of 35.5%
to 31.1% over the same period.
15
In that period, GDP rose 1.8 times more than real wages and 2.7 times more than minimum wages.
35