The job bill for the coronavirus crisis in Latin America and the Caribbean is unprecedented: up to 30 million people have lost their jobs since the pandemic began, according to the Covid-19 Labor Observatory of the Inter-American Development Bank. This job destruction, which has mainly affected informal workers and those in the service sector, proves that the economic and labor crisis is, together with the health crisis, the greatest challenge facing the countries of the region.
Latin American and Caribbean countries have faced other crises in the past. However, the pandemic has paralyzed economies and its effects on employment are of great magnitude. The confinement and social distancing measures necessary to mitigate the spread of the coronavirus have affected most jobs, with many of them highly likely to be permanently destroyed. The effect this has is magnified by the reality of the region: it is the most unequal in the world, where the majority of people work in the informal sector and cannot access social safety nets.
The good news is that technology has prevented the jobs crisis from getting even deeper. This is shown in ¿How can technology facilitate the recovery of employment after covid-19?, the latest installment in the series The future of work in Latin America and the Caribbean. During the first half of the year, there was an exponential growth in the number of application downloads that had had a slow adoption. This includes applications for telecommuting, which went from 750 thousand monthly downloads to 15 million. Home delivery app downloads increased 50% in this period, while freelance app downloads (freelancing) increased by 30%. In addition, online training applications have almost doubled from what was observed in 2019.
Home delivery app downloads increased 50% in the pandemic period, while freelance app downloads increased 30%
Although the pandemic has accelerated technological expansion, there are many challenges to make it permanent and massive. The report shows that, as of the second semester, the downloads of these applications reduced their growth. This indicates that there are significant challenges to overcome to expand the reach of these technologies, including the lack of internet access and devices, the overwhelming digital skills gap, as well as the lack of technological readiness on the part of companies that have been forced to implement a digital transformation.
The inclusive recovery of employment will be the great challenge of the years ahead, an objective for which technology can be the best ally. This will require strong support to enable its adoption on several fronts. For example, access and digital literacy must be improved through increased public and private investment. Likewise, the revitalization of the labor market will require workers specialized in new technologies and processes. One way to achieve this could be the redesign of technology education, which universally certifies skills in the cloud to reduce search costs for companies. Finally, it would be desirable to achieve new social insurance schemes for those who are currently unprotected. New technologies may represent an opportunity to create new electronic insurance products, which at the same time improve the financial inclusion of the population. In other words, the pandemic can become an opportunity to help workers be more prepared, resilient and productive. It is our obligation to work to make it so.
Oliver Azuara is a Senior Labor Markets Economist at the Inter-American Development Bank (IDB).
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