Latin America “seriously” explores the proposal to create a Basic Emergency Income to alleviate the coronavirus crisis

21 Mayo 2020
Economic Affairs

The proposal was made a few days ago by the head of the UN for the economy in the region, who insists on the need for this income in the face of a serious economic outlook that will lead 50 million people into poverty in Latin America and El Caribbean.

Faced with the prospect of the worst economic contraction in the region since 1930, with a 5.3% fall in Gross Domestic Product and a significant increase in the unemployment rate, among other negative economic impacts, The Economic Commission for Latin America and the Caribbean insisted on Thursday the creation of an emergency basic income for six months that would serve to pay for basic needs and sustain household consumption.

During a videoconference that addressed the labor situation during the Coronavirus pandemic, the executive secretary of ECLAC, Alicia Bárcena, and the regional director of the Office for Latin America and the Caribbean of the International Labor Organization, Vinícius Pinheiro, drew a grim regional overview.

Negative effects of the pandemic on the labor market

In relation to the negative effects caused by the pandemic, Bárcena indicated that formal work saw a reduction in hours worked, a drop in wages and layoffs, while informal work was affected by the decrease in employment due to distancing, prohibition of circulation and less access to income compensation and the vulnerability of women.

The joint report of the Commission and the International Labor Organization highlights that 42.4% of employment is in sectors highly affected by physical distancing measures, causing very high risks in areas such as commerce, restaurants and industries, accommodation and real estate activities.

Significant increase in unemployment….

After noting that a 10.3% reduction in working hours is expected in the second quarter of the year, Bárcena explained that an increase in the unemployment rate of 11.5% is expected after growing 3.4% in the latter months.

And this means that we will have 37.7 million unemployed. In other words, we will have 11.5 almost 12 million additional unemployed by 2019. Very worrying and, as I said, figures that we believe are even optimistic for what is expected to happen ”.

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ILO
Construction workers.

…. and significant growth in poverty

This means that the fall in GDP and the increase in unemployment generate a very strong impact on poverty and extreme povertyBárcena pointed out, who indicated that the number of poor people will increase by 30 million from 186 million to almost 215, 34.7% of the Latin American population, and from 63 million to 83 million the number of people affected by extreme poverty.

Given this increase in both types of poverty, ECLAC proposes the creation of a Basic Emergency Income (IBE), explained Bárcena.

“We have called it Basic Emergency Income equivalent to a poverty line. A poverty line that is roughly equivalent to $ 143 in 2010. AND this is put in place for six months to meet basic needs and sustain household consumption which is where the great impact of the pandemic is going to be, “he said.

Bárcena calculated that the additional spending by governments was 2.1% of GDP with a long-term strategic objective of implementing a universal basic income through innovative financing mechanisms.

It is essential to prioritize safety and health at work

For his part, the regional director of the Office for Latin America and the Caribbean of the International Labor Organization, Vinícius Pinheiro, described the regional scenario as “terrifying” and that it requires very ambitious responses from governments. through innovative policies that contribute to maintaining the productive and social fabric.

According to Pinheiro, the key element for the reactivation of the economy is to prioritize safety and health at work by sectors and gradually through negotiation between workers, employers and governments since it is “a collective responsibility”.

Recovery will be very slow

Asked about the countries’ response to the Basic Emergency Income initiative, Bárcena indicated that it is very recent and that she believes that it is being “seriously explored” since “there are many countries that have implemented emergency income, but they have done so for a month, or rather even the first month with more resources, the second with less, etc ”.

Added that recovery will be very slow “For thousands of reasons”, such as the lack of a vaccine that will make us coexist with the virus for a long time and that will cause profound changes in work models, social organization, among others.

“There is not going to be a return to normalcy as we knew it before, in reality what we believe is that we must take control, all societies, to create a different future. Robotization, automation, digitalization will surely be a reality and therefore We should both see how to better invest to make broadband a global public good“.

Finally, and given this long recovery time, he stressed the importance of training workers.

21 Mayo 2020
Economic Affairs

The proposal was made a few days ago by the head of the UN for the economy in the region, who insists on the need for this income in the face of a serious economic outlook that will lead 50 million people into poverty in Latin America and El Caribbean.

Faced with the prospect of the worst economic contraction in the region since 1930, with a 5.3% fall in Gross Domestic Product and a significant increase in the unemployment rate, among other negative economic impacts, The Economic Commission for Latin America and the Caribbean insisted on Thursday the creation of an emergency basic income for six months that would serve to pay for basic needs and sustain household consumption.

During a videoconference that addressed the labor situation during the Coronavirus pandemic, the executive secretary of ECLAC, Alicia Bárcena, and the regional director of the Office for Latin America and the Caribbean of the International Labor Organization, Vinícius Pinheiro, drew a grim regional overview.

Negative effects of the pandemic on the labor market

In relation to the negative effects caused by the pandemic, Bárcena indicated that formal work saw a reduction in hours worked, a drop in wages and layoffs, while informal work was affected by the decrease in employment due to distancing, prohibition of circulation and less access to income compensation and the vulnerability of women.

The joint report of the Commission and the International Labor Organization highlights that 42.4% of employment is in sectors highly affected by physical distancing measures, causing very high risks in areas such as commerce, restaurants and industries, accommodation and real estate activities.

Significant increase in unemployment….

After noting that a 10.3% reduction in working hours is expected in the second quarter of the year, Bárcena explained that an increase in the unemployment rate of 11.5% is expected after growing 3.4% in the latter months.

And this means that we will have 37.7 million unemployed. In other words, we will have 11.5 almost 12 million additional unemployed by 2019. Very worrying and, as I said, figures that we believe are even optimistic for what is expected to happen ”.

[Descarga nuestra aplicación Noticias ONU para IOS o Android. O subscríbete a nuestro boletín.]

ILO
Construction workers.

…. and significant growth in poverty

This means that the fall in GDP and the increase in unemployment generate a very strong impact on poverty and extreme povertyBárcena pointed out, who indicated that the number of poor people will increase by 30 million from 186 million to almost 215, 34.7% of the Latin American population, and from 63 million to 83 million the number of people affected by extreme poverty.

Given this increase in both types of poverty, ECLAC proposes the creation of a Basic Emergency Income (IBE), explained Bárcena.

“We have called it Basic Emergency Income equivalent to a poverty line. A poverty line that is roughly equivalent to $ 143 in 2010. AND this is put in place for six months to meet basic needs and sustain household consumption which is where the great impact of the pandemic is going to be, “he said.

Bárcena calculated that the additional spending by governments was 2.1% of GDP with a long-term strategic objective of implementing a universal basic income through innovative financing mechanisms.

It is essential to prioritize safety and health at work

For his part, the regional director of the Office for Latin America and the Caribbean of the International Labor Organization, Vinícius Pinheiro, described the regional scenario as “terrifying” and that it requires very ambitious responses from governments. through innovative policies that contribute to maintaining the productive and social fabric.

According to Pinheiro, the key element for the reactivation of the economy is to prioritize safety and health at work by sectors and gradually through negotiation between workers, employers and governments since it is “a collective responsibility”.

Recovery will be very slow

Asked about the countries’ response to the Basic Emergency Income initiative, Bárcena indicated that it is very recent and that she believes that it is being “seriously explored” since “there are many countries that have implemented emergency income, but they have done so for a month, or rather even the first month with more resources, the second with less, etc ”.

Added that recovery will be very slow “For thousands of reasons”, such as the lack of a vaccine that will make us coexist with the virus for a long time and that will cause profound changes in work models, social organization, among others.

“There is not going to be a return to normalcy as we knew it before, in reality what we believe is that we must take control, all societies, to create a different future. Robotization, automation, digitalization will surely be a reality and therefore We should both see how to better invest to make broadband a global public good“.

Finally, and given this long recovery time, he stressed the importance of training workers.