Costa Rica, Chile and Peru are among the countries most affected by virus-related job loss

RIO DE JANEIRO, BRAZIL – According to International Labor Organization (ILO) estimates, over 110 million jobs were lost last year.

Although this trend has slowed in recent quarters, the economic impact of the Covid-19 pandemic has been devastating, causing significant damage to labor markets.

As reported in previous studies by the Santiago Chamber of Commerce, Chile is one of the most affected countries in terms of employment at a global level.

This occurred during the most complex stages of the crisis, with annual drops of around 20% between June and August; despite the fact that by January this year Chile managed to contain job loss rates to 11%, it is still among the world’s most affected countries.

According to the organization’s study, since last July, one of the most critical months, the Chilean labor market has recovered slightly more than 1 million jobs. Nevertheless, the country continues to be ranked among the most affected countries.

Moreover, in terms of variation in the number of jobs between March and December 2020, the nation with the largest drop is Armenia, where the labor supply fell by 19%. It is followed by Finland, which shows a drop of around 15%, while Costa Rica comes third, with a drop of 11.6%.

On the other hand, Chile and Peru posted losses of close to 10%, in addition to Brazil, which also showed a significant impact, with a 6.6% drop in employment.

It should be noted that in many countries, particularly in Europe, the aggressive implementation of early job retention measures and incentive programs for temporary hiring, i.e., short-term employment, helped to partially reduce the risk of unemployment.

However, the most effective initiatives were linked to deconfinement plans, whenever health conditions allowed it. This is the case in countries such as Hungary (3.7%), Canada (1.7%), Austria (1.5%) and Poland (0.8%), which have managed to recover a significant proportion of their jobs.

When considering these mitigation plans in South America, Colombia’s actions stand out, since the reduction of restrictions on mobility adopted as of September enabled the recovery of a significant number of jobs, achieving a growth of 4.3% between March and September. However, there was a setback in January, as a consequence of new containment measures due to outbreaks.

The rest of South America was strongly impacted during the first months of the pandemic, between April and September 2020. Since then, the opening up of cities has led to a marked improvement in indicators, although still at levels far below those seen before the outbreak of the coronavirus.

Currently, the efforts to contain the second outbreak have not had a significant impact on employment, with the exception of the Colombian case. Moreover, the Santiago Chamber of Commerce stated that the vaccination process started in recent weeks in the region will help to minimize, and even reverse, the adoption of such policies.

In addition, the organization warned that returning to employment levels seen before March 2020 will be complex in the short and even mid-term, because forced productivity gains during the crisis have reduced the structural demand for labor, and have driven a more intense and accelerated adoption of digital tools.