However, the recovery of employment has been slow, incomplete and uneven.

In N⁰ 26 of their joint publication Coyuntura Laboral en América Latina y el Caribe; Real Wages during the Pandemic: Evolution and Challenges, both UN agencies indicate that the delay in the recovery of pre-pandemic employment levels compared to the recovery of economic activity in the countries should be highlighted.

By the end of 2021, several of the countries had recovered their pre-crisis GDP level, while employment levels, in many cases, were still below.

As has been the case in other crisis situations, the dynamics between employment and economic activity play a key role in implementing better and more timely labor policies, so the possible lags in employment suggest the need to strengthen instruments that facilitate the reincorporation of people into the labor market, the document notes.

According to the report, after the historic contraction recorded by the number of employed people in the region during 2020 (8.2%), in 2021 there was a significant recovery of that indicator, which was 6.8% between the fourth quarter of the year and the same period of 2020. However, despite the considerable increase in employment throughout the year, only as of the fourth quarter of 2021 did the number of employed persons in the region reach the level recorded at the close of 2019.

Labor gaps between men and women have deepened in 2021. ECLAC and ILO show that the recovery of labor markets has also been unequal, to the detriment of women; although there has been an improvement in employment and participation of both men and women, this has been greater in the first case than in the second.

The crisis generated by the coronavirus disease pandemic (COVID-19) had a more significant impact on female employment, registering a setback equivalent to more than 18 years in the levels of the female participation rate. The slow recovery of the activities that concentrate female employment and the greater weight of women in caring for the sick, children and the elderly contribute to explaining this marked difference in the dynamics of the overall participation rate.

In the second part of the report Labor Situation in Latin America and the Caribbean N⁰ 26 , ECLAC and ILO state that the health crisis resulting from COVID-19 has had important effects on the evolution of wages in the region. On the one hand, the impact of the recent evolution of inflation has been most clearly observed in real minimum wages, whose purchasing power decreased in 2021.

It also stands out that average real wages in the region in 2021 were 6.8% below pre-pandemic levels, lagging further behind those levels than economic activity and employment. This could even worsen in 2022, a period for which even greater increases in inflation are expected.

"It is essential to activate institutionalized instruments, such as collective bargaining and the determination of minimum wages, so that wage adjustments can be discussed at the level of productive units and branches of activity in order to respond to the needs of workers and companies", say Mario Cimoli, Acting Executive Secretary of ECLAC, and Claudia Coenjaerts, Acting Regional Director of the ILO for Latin America and the Caribbean, in the foreword to the document.

They add that policies that facilitate the insertion of wage earners, such as hiring subsidies targeted at the most vulnerable groups, will not only contribute to a more accelerated recovery of employment among these groups, but will also favor wage conditions that do not imply precariousness with respect to pre-pandemic levels.

According to the document, a slowdown in the pace of job creation is expected by 2022, while progress in the vaccination process, fewer restrictions on mobility and the reopening of schools are expected to drive a recovery in participation levels, especially among women. However, the combined effect of higher labor participation and a slow pace of job creation could drive the unemployment rate higher during the year.

According to ECLAC and ILO, in a context in which there is still room for the recovery of employment to pre-pandemic levels, the possibility of making nominal minimum wage adjustments to compensate for the losses caused by the increase in inflation is key. In this sense, the reactivation of dialogue mechanisms between governments, workers and employers to set minimum wage adjustments has great potential to reconcile the needs of labor actors.

This would serve to implement minimum wage increases to compensate for the increase in inflation, also considering its impact on production costs, especially for micro, small and medium-sized enterprises (MSMEs), as well as on the generation and recovery of employment.