A new report from the International Labour Organization reveals a troubling dichotomy in Caribbean and Latin American labor markets. While unemployment rates continue their downward trajectory across the region, underlying structural weaknesses are creating what experts term a “hollow victory” in employment metrics.
The ILO’s 2026 Employment and Social Trends report indicates that beneath surface-level improvements lies a more complex reality of stagnating work quality, declining productivity, and entrenched informality. This paradox presents particular challenges for Caribbean nations, where fewer unemployed persons masks the reality that many workers remain trapped in low-productivity, informal, and insecure employment arrangements that ultimately undermine long-term economic growth and social cohesion.
Informality persists as the region’s most stubborn challenge, with over 51% of workers across Latin America and the Caribbean engaged in informal employment since 2015—showing virtually no improvement over the past decade. The Caribbean demonstrates striking disparities, with Haiti recording 91.0% informality rates, followed by Barbados at 62.0% and Jamaica at 54.6%.
Youth employment presents particularly alarming trends. After years of gradual improvement, the percentage of young people not in employment, education, or training (NEET) reversed its downward trend in 2024 and is projected to worsen. This development carries dual consequences: diminished lifetime earnings and employment prospects for youth, and weakened productive capacity for regional economies.
Compounding these challenges, critical sectors including healthcare, education, and agriculture face acute labor shortages despite persistent unemployment elsewhere. This paradox stems largely from outward migration, as highly educated and skilled workers seek better compensation and working conditions in OECD countries. While migration generates benefits through remittances and skills circulation, unmanaged outflows leave essential services understaffed and weaken domestic productive capacity.
The region’s productivity crisis reveals alarming comparative data. Between 2015 and 2025, labor productivity in Latin America and the Caribbean fell by an average of 0.4% annually, with the Caribbean alone experiencing a 0.6% decline. This contrasts sharply with global productivity growth of 1.7% and high-income countries’ 1.1% average growth during the same period.
Addressing these challenges requires moving beyond job creation to fundamentally transform job quality. Policy priorities must include revitalizing investment, accelerating technological adoption, supporting formalization within sectors, and expanding access to quality education and training. Regional cooperation on labor mobility and skills development has transitioned from optional to essential for sustainable development.
The CARICOM Secretariat, alongside member states and social partners, is currently developing a regional labor migration policy and action plan—a promising step toward addressing these systemic challenges. The Caribbean labor market stands at a critical crossroads, where the central question is no longer whether people are working, but whether work itself can become a genuine engine for prosperity, inclusion, and resilience.