(Bloomberg) -- Latin American governments need to address a brewing jobs crisis for young workers that further risks the region's fragile stability, according to the International Labor Organization.
About 26 million people in Latin America lost their jobs last year, according to an ILO report published Wednesday, and the recovery this year is heavily concentrated in all-cash, informal gigs that risk widening income inequality going forward. Young workers, especially women, have endured the lion's share of lost employment, hours and wages.
Read more: Pay Cuts of 36% Show Latin America's Economies Faltering
“The disproportionate impact of the pandemic on the youth is a time bomb that could affect social and political stability in Latin America and the Caribbean,” said Vinicius Pinheiro, regional director for the ILO, an organization of the United Nations. “The quality of work is very concerning, it hasn't improved.”
The region lacks policies that help pave the way for workers to obtain salaried work with benefits like healthcare, Pinheiro said. Amid an incipient recovery, about 70% of the new positions created in the region's biggest countries have been informal. That's translated into far greater pay cuts. In Brazil, for example, income for informal workers fell 14% last year, while salaried, payroll employees only took a 5% pay cut.
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