WB: almost half of Latin American households earn less than before the pandemic

The economies of Latin America and the Caribbean have not yet recovered from the crisis caused by the pandemic And although there are signs of improvement in some countries, the quality of jobs, household income levels and food insecurity persist in others, according to a report by the World Bank.

The report, based on a telephone survey commissioned by the World Bank and the United Nations Development Program (UNDP), addresses the regional situation almost two years after the pandemic in key areas such as the labor market, income and insecurity. food for families, education, health and finances.

At the regional level, the employment rate remains 11 percentage points below what it was before the pandemic, with 62% of people over 18 years of age currently working. While in countries such as Colombia and Brazil the comparative difference is significant – close to 17% less – and in others such as Guatemala, Nicaragua and El Salvador, the current employment rate has exceeded that prior to the pandemic.

The Latin American and Caribbean region, the report noted, is emerging from the crisis of the COVID-19 with weakened economies, which limits the ability of workers to reintegrate into the labor market. Although there are signs of recovery and employment has grown compared to 2020, the quality of jobs has deteriorated, with an increase in informality.

On average, formality has fallen 4.8 percentage points, with Panama and Peru showing the greatest decline. In addition, the number of self-employed rose from 15% to 20% and the number of weekly hours worked fell from 43 before the pandemic to 37.

The report also noted as a “special concern” the fact that the quality of work has worsened mainly among the most vulnerable groups such as women, the elderly and workers with less formal education.

In the region, one in four workers who had a job before the pandemic no longer work and more than half of them report having left the labor market, according to the report.

After Haiti, whose unemployment is close to 46%, Colombia is the country that has lost the most jobs, with unemployment reaching 35%. They are followed by Panama, also with 35%; Honduras, with 32%; Chile, 31%, and Brazil, Ecuador and Peru, with 29%. Regionally, unemployment averaged 10% before the pandemic and rose to 16%.

The negative effects of the labor market are reflected in household income, according to the report. About 50% of families in the region still have difficulties to recover the income they had before the pandemic despite the efforts of governments to alleviate the economic effects of the health crisis.

For some countries, including Guatemala, Honduras and El Salvador, the recovery is visible and the number of households that report that their income is less than it was before the pandemic has even fallen. In contrast, in other countries such as Bolivia, Paraguay, Ecuador and Colombia, the incomes of more than 60% of households have not yet improved.

Another sector where the impact of the lack of resources is reflected is food: twice as many households now face insecurity to obtain food, compared to the situation at the beginning of the pandemic. 24% of families reported having been left without food due to lack of money or other resources, compared to 13% previously.