2004 LABOUR OVERVIEW AND OUTLOOK

1. 2004 LABOUR OVERVIEW AND OUTLOOK XXXVIII GRIC / SIRG GRIC inf 17/05 June 8, 2005 Original: spanish • Overview economic data labour data • Creating jobs to confront poverty and strengthen democratic governance • Poverty economic, social and political dimensions • Democracy economic, social and political dimensions • A development model which is decent work-friendly • 4.Some concrete proposals

2. ECONOMIC DATA • - 2004 global economic growth: 5.1% • highest growth rate since the ‘70s • forecasts for 2005: 4.1% • - Latin America and the Caribbean economic growth 5.8% • highest growth rate since1985 • for the second time in 20 years, the 6 largest economies grew simultaneously more than 3% • several countries grew more than 5% • forecasts for 2005: 4.1% - 4.4% • - The outlook for 2006 is not so encouraging

3. ECONOMIC DATA FORLATIN AMERICA AND THE CARIBBEAN • Average inflation rate: 6.5% in 2004 and 10.6% in 2003 • For third consecutive year there was a positive trade balance • Most important destination for remittances in the world • -US$45.8 bn (2004) / US$ 38 bn (2003) • -75% of the remittances come from the U.S.A. • -Mexico is the primary destination of remittances (US$ 16.6 bn) • Foreign direct investment (FDI) increased for the first time since 1999 • -Brazil was the principal recipient (US$ 18 bn) • Poverty: 42.9% 222 millons approx • Indigence: 18.6% 96 millons approx • Income inequality(no significant variation since 1990) • 10% + richest 35.6% of total income • 10% + poorest 1.7% of total income

4. LABOUR DATA FORLATIN AMERICA AND THE CARIBBEAN • UNEMPLOYMENT • 19 millons of unemployed urban workers (unemployment rate similar to that of 1998) • Economic growth without job creation • Female unemployment rate is 1.4 times higher than that of men • Youth unemployment rate: 20.9% (double the total rate)

5. LABOUR DATA FOR LATIN AMERICA AND THE CARIBBEAN • INFORMAL SECTOR • 1990-2003: 61 out of 100 newly employed workers • 46.7% of the total non-agricultural employed workers belong to the informal sector • More informal female workers than male workers • Colombia and Paraguay + than 60% • Chile and Uruguay - than 40% • WAGES • Manufacturing wages (for 15 countries) > 5% in real terms • Minimum wages (for 16 countries) in 9>, in 7< • Average weighted wage > 8% • Average weighted wage> 2.1% (excluding Argentina) • The Latinobarometro survey rates on those who cannot meet the monthly expenses on the family’s income: • 2000: 12% 2004: 24%

6. LABOUR DATA FOR LATIN AMERICA AND THE CARIBBEAN • Access to some type of social protection • 6 of every 10 new wage and salaried workers • 2 of every 10 new wage and salaried informal sector workers • Rate of workers worried abount being laid off within the next 12 months: • 76% according to a Latinobarometro survey • 1.3 million people are victims of forced labour • 27.7 millon children are employed in economic activities, many of them in dangerous conditions • 30 millon of labour accidents per year, most of them not officially reported (= 10% of the regional GDP)

7. CREATING JOBS TO CONFRONT POVERTY AND STRENGTHEN DEMOCRATIC GOVERNANCE The theme for the upcoming IV Summit of the Americas highlights three important facts, among others. • The lack of good quality jobs is today the main concern of women and men in our countries, as indicated by several opinion polls. • Policies applied during the last decades have led to economic growth without generating enough quality jobs. • Employment is key for a better present and future

8. POVERTY "We are certain that poverty cannot be resolved through welfare programs. Even when such programs constitute a necessary measure until an effective solution to the problem is found, we must avoid creating societies that are divided among those who have work and those on welfare. (…) Moreover, we reaffirm our belief that decent work as conceived by the ILO is the most effective framework for improving the standards of living of our nations and for sharing the wealth of material and human progress.” “Declaration of Santa Cruz”, Heads of State and Government of the Americas, No. 23, November 2003

9. DEMOCRACY Work is still the best way to achieve personal success and to better play our role within society: it helps in enhancing self-esteem, provides social prestige and generates income which facilitates civil and political participation. Work is, has been and will remain the key component of the social contract. It forms the basis for creating societies of free women and men, and it is the foundation for democratic governance.

10. A DEVELOPMENT MODEL WHICH IS DECENT WORK-FRIENDLY In the Third Millennium, the strengthening of democracy and freedom within the Hemisphere demands a development policy which promotes economic growth and simultaneously is decent work-friendly. Such a development model must be based on the integration of economic and social policies. “We are committed to the principles of decent work proclaimed by the International Labour Organization,” “Declaration of Nuevo Leon”, Heads of State and Government of the Americas, January 2004

11. DECENT WORK: CATALYST OF POLICY INTEGRATION Economic Dimension: Regional Employment Conferences in MERCOSUR, CAN, SICA, CARICOM (2004/2005) propose linking and integrating macroeconomic, mesoeconomic and microeconomic policies to generate more and better jobs,. Social Dimension: Financing and extension of social protection policies; emphasis on occupational safety and health. Poltical Dimension: Declaration of Fundamental Principles and Basic Rights at Work (Interamerican Democratic Charter, 2001); tripartite social dialogue to generate consensus and social cohesion.

12. SOME CONCRETE PROPOSALS • That the America be an area free of child labour and forced labour conditions. • Investment and maintenance in infrastructure oriented to generate employment and business development, especially the promotion of small and medium enterprises. • Support entreprenership and employment among youth. • Multilateral financial organisms must develop credit programs to support decent work generation (with adequate technical assistance and in permanent social dialogue with governments). • Improve national institutions to facilitate the reduction of transaction costs and thus promote formal productive and labour activities. • Promote public and private efforts to reduce the gender gap. • Reduce work-related accidents and illnesses.