Almost half of Latin American families earn less than before the pandemic

Latin America and the Caribbean emerge from the Covid-19 crisis with a weakened economy, lower income in nearly half of families and twice as food insecurity, found a survey by the World Bank and the United Nations Development Program (UNDP ).

The situation has improved as countries eased containment measures and vaccination campaigns advanced, but the regional employment rate is 11 percentage points lower than before the pandemic, with 62% of the working-age population currently employed, he points out.

Colombia, Brazil and Ecuador were heavily affected. The employment rate relative to pre-pandemic levels has only increased in Guatemala, Nicaragua and El Salvador, but at the expense of the deteriorating labor market, with more informality and fewer hours worked.

Almost one in four people employed before the pandemic say they no longer work. The country with the biggest job losses is Haiti, followed by Colombia (35%).

The loss of jobs had a direct impact on families, as almost half of households did not regain their income level.

Income appears to be increasing in Guatemala, Honduras and El Salvador compared to mid-2020, but in Bolivia, Paraguay, Ecuador and Colombia, more than 60% of households “have yet to show signs of recovery”. And this despite government subsidies and emergency aid “which together benefit 46% of families in the region”, adds the World Bank.

During the pandemic, food insecurity nearly doubled, especially in countries with greater inequality and poverty.

The pandemic highlighted pre-existing inequalities, says Luis Felipe López-Calva, UNDP regional director for Latin America and the Caribbean, who guarantees that “this research allows us to know the region and propose solutions based on evidence”.

Access to health services has returned to pre-pandemic levels, but the rate of vaccination in the Caribbean is worrying.

Finally, the survey highlights that the pandemic has increased digital transactions, both mobile banking and e-commerce.

To emerge stronger from the crisis, the region must carry out reforms “already known, but pending”, estimates Carlos Felipe Jaramillo, vice president of the World Bank for Latin America and the Caribbean.

Among these reforms, Jaramillo lists: improving the quality of education, facilitating private investment to generate jobs, investing in renewable energy and allocating resources for urban mobility – such as air quality and replacement of public and private vehicle fleets.