Transforming Jobs in Latin America and the Caribbean

In the past decade, the world has transformed significantly. New technologies and ideas are fueling economic growth. However, the labor market in Latin America and the Caribbean (LAC) has not kept pace. Today’s youth entering the workforce encounter the same quality jobs as almost a decade ago. For a region grappling with low growth and enduring poverty, this is an urgent agenda.

Quality jobs matter for many reasons. They enable prosperity for workers and their families, economic stability, and productivity. They help boost a society’s overall development and offer paths out of poverty. Yet, the region finds itself stuck on this front. The World Bank’s Job Quality Index (JQI) reveals a troubling trend: since 2016, most countries in the region have shown moderate to no improvements in job quality, measured as a combination of labor earnings, job benefits, satisfaction, and security. While countries like Brazil, Colombia, Costa Rica, El Salvador, and Mexico have seen modest improvements, the overall picture remains bleak. In many countries, job quality has either declined or remained stagnant, with significant gender disparities persisting. Women continue to experience worse job conditions than men across all countries in the region. On average, women are 5% more likely to have unstable jobs compared to men.

This issue is intertwined with the region’s overall economic tepid performance. With projected growth rates of just 1.9% in 2024 and 2.6% in 2025 according to the World Bank’s Latin America and the Caribbean Economic Review (LACER), the region is expected to have the lowest growth rates globally. These aren’t merely economic statistics; they represent significant barriers to development, leading to fewer job opportunities, and stagnant wages and poverty rates. One in four people in Latin America and the Caribbean still live below the poverty line, and poverty reduction is projected to slow down. When economies stagnate, the potential of their people is severely limited.

As the region looks to the future, there are opportunities that can be seized, and that may lead to the creation of the quality jobs needed, such as the green transition and nearshoring. To do this, LAC must quickly adapt. Currently, only 2 out of 10 of workers hold jobs that will directly benefit from a greener economy. Generative Artificial Intelligence could also offer paths for better jobs. It could boost productivity for up to 14% of jobs in Latin America and the Caribbean. Unfortunately, inadequate digital infrastructure means that nearly half of these workers—around 17 million—won’t be able to access the advantages of this technology for improved job prospects and higher wages.

To tackle these challenges, the region must focus on key areas:

First and foremost is education. Today, more than 60 percent of 10-year-olds are unable to read and understand a simple text. This shortfall is a critical bottleneck to our future progress.  If children do not attain the foundational skills in primary education, all other education outcomes are at risk.  We must invest in our young people, expand technical and tertiary education opportunities, ensuring that people can develop the socioemotional and digital skills required to adapt to an evolving job market.

Second, implementing labor market reforms that ensure fair wages, job security, and decent working conditions can significantly improve job quality. This involves enforcing labor laws and providing social protection for all workers. Third, enhance digital infrastructure and encourage both workers and employers to embrace digital technologies, ensuring that connectivity is both accessible and equitable.

Finally, these efforts must adopt a gender perspective. Promoting women’s entry into quality jobs is essential. Countries should improve access to affordable care services to enhance women’s workforce participation and career prospects. Furthermore, increasing women’s representation in STEM fields will help them advance in crucial sectors, reducing the technology gap.

Empowering LAC’s people through quality jobs is critical for the region’s development.