Seven Policy Recommendations from the First Six Months of the Future of Work Initiative

04.30.2021 | Diego Contreras, Manuela Reveiz

As the impact of the pandemic in Latin America came into view, CIPE embarked on a new initiative, The Future of Work, to bring attention to continuing challenges and to focus on opportunities to strengthen the region’s economic recovery after COVID-19. During the last six months, our conversations with experts from across Latin America have generated ideas on how to not only return to a pre-pandemic reality but move beyond the crisis to a stronger and equitable landscape. The pandemic continues to embroil the region, but now is the time to consider what steps are needed to create a sustainable recovery. Here we highlight seven recommendations from our past events as we look to identifying greater solutions to the region’s challenges.

Policy 1: Develop financial incentives in PDETs.

“We have been focusing resources to implement mechanisms. Taxes are very beautiful instruments to encourage the private sector to construct new initiatives.”  – Emilio Archila, Colombian Presidential Counselor for Stabilization and Consolidation

On March 2, panelists discussed policy changes to jumpstart the economy in PDET regions (municipalities most affected by violence and poverty) in Colombia. The event focused on COVID-19’s economic impact and the opportunities that new digital technologies can afford to PDETs. The speakers mentioned that before the pandemic, investment in PDET regions was growing at a faster pace than investment at the national level but COVID-19 had a disastrous effect in these regions, with a 30% survival rate among businesses. Panelists included Emilio Archila, Colombian Presidential Advisor for the Stabilization and Consolidation of the Territory, Jaime Arteaga, Director of the Private Investment Observatory and General Director of Jaime Arteaga & Associates, and Nathalie Renaud co-Deputy Director of the USAID/Colombia Program Office.

Future of Work Recommendation:

Develop financial incentives to promote the provision of goods and services from PDETs (for example tax exemptions to buyers and public procurement). “If a company buys its products from a PDET region, a certain amount of that purchase could be reduced from the company’s profit tax.” It would also be significant to exempt micro and macro businesses located in PDETs from paying register renovation costs to the Chamber of Commerce and procurement costs. (Jaime Arteaga)

Watch “The Future of Work in Colombian Regions Most Affected by Poverty & Violence.”

Policy 2: Reform the education system in Colombia

“Maybe what COVID did is accelerate a process that was already beginning from many years ago such as digitizing and work from home. This is a trend that came to stay.” – Cristina Fernandez, Senior Researcher at Fedesarrollo

On November 17, 2020, CIPE hosted an event on the effects of the pandemic on labor markets in Colombia. The pandemic has intensified labor market challenges in the short-term and increased potential for seismic shifts in the near and long-term future. The COVID-19 crisis occurred across all sectors and productive occupations, however there are differences in the behavior of employment during the pandemic across sectors and gender. Our panelists, Cristina Fernandez, Senior Researcher with Fedesarrollo and Ernesto Borda, CEO of Trust, highlighted that unemployment rates increased particularly sharply in the services sectors and provided policy recommendation for the near future.

Future of Work Recommendation:

A long-term change would be to reform the education system to adapt recent changes of the labor demand, in particular technological changes. Robotization and other technological innovations displace workers who perform routine activities with medium skill levels. However, automation can also increase the demand for highly skilled workers. (Cristina Fernandez)

Watch “Future of Work: Labor Markets and Covid-19 in Colombia.”

Policy 3: Increase paternity leave & improve childcare in Latin America.

“Women were expelled from the labor market. One-fifth of women work in domestic employment in private homes and remote jobs are much more likely to be occupied by men.” – Gala Díaz Langou, Director of CIPPEC

In partnership with the Center for Women’s Economic Empowerment (CWEE) we hosted a conversation April 8 on the labor market challenges women in the region currently face, and the potential for digitalization efforts to create a more equitable post-pandemic economy. Our panelists, Gala Díaz Langou, Director at CIPPEC and Claudia Umaña Araujo, Vice President of FUSADES addressed why women were especially hit by the COVID-19 crisis and brought forward recommendations to achieve sustainable economic growth with productive and quality jobs for women in Latin America.

Future of Work Recommendation:

Paid leave is an important policy to reduce the burden of care work, which is generally unpaid and is predominantly done by women. A long-term structural change would be to increase and encourage paternity leave. The average paternity leave in Latin America for fathers is 5 days and for mothers 14 weeks. Including men in leave policies promotes parental co-responsibilities and generates better future patterns. (Gala Díaz Langou)

Watch “Future of Work: Women in the Economic Recovery in Latin America post-COVID-19.”

Policy 4: Equip workers with the skills for tomorrow’s jobs.

“The Status quo is not an option if we want to take advantage of the window of opportunity of new technologies to generate better sources of labor.” – Ramiro Albrieu, Senior Researcher at CIPPEC

On February 16, CIPE hosted Ramiro Albrieu, Senior Researcher at CIPPEC, and Irene Brambilla, a Professor of Economics at Universidad Nacional de La Plata, for an event on the technological changes accelerated by the pandemic and their impact on the labor market in Argentina. The panelists also discussed what role the private sector and government institutions will play in helping workers adapt to these changes. New technologies disrupting the labor market have uneven impacts among different groups of workers, affecting less educated workers, women, and older workers more intensely.

Future of Work Recommendation:

Introduce policy solutions that protect the groups most vulnerable to the disruption of technology in the workforce (less educated workers, women, older workers, among others). At the same time, policymakers must not stop these technological disruptions as they are necessary to bring prosperity; they must instead create incentives for the private sector to invest in technology and focus on productivity. (Ramiro Albrieu)

Watch “Future of Work: Technological Change and Workers in Argentina.”

Policy 5: Adopt new technologies in the fight against corruption.

“Technology gives the tools citizens and civil society need to fight corruption on their own.” – Mauricio Alarcón, Fundación Ciudadanía y Desarrollo

On February 3, the LAC department and the Anti-Corruption and Governance Center (ACGC) hosted three speakers to discuss the opportunities and challenges for the adoption of new technologies in the fight against corruption. The speakers included, Mauricio Alarcón, of the Fundación Ciudadanía y Desarrollo in Ecuador, Laura Alonso, a Reagan Fascell Fellow at the National Endowment for Democracy, and Ana Linda Solano a consulting attorney and Research Professor at Colombia’s Externado University. The speakers discussed digitalization of administrative procedures and open-source procurement processes.

Future of Work Recommendation:

Create a transparent environment not only for reducing corruption, but for maintaining strong democratic institutions. Strong institutions are better able to represent and serve civil society and provide confidence for foreign investors looking to invest in the region. (Mauricio Alarcón)

Watch “Future of Work/COVID-19 and Corruption: Digital Technology and the Fight Against Corruption in Latin America.”

Policy 6: Expand digital tools for a humane justice sector.

“Automatization frees employees from repetitive tasks, allowing them to dedicate more time to more rewarding tasks.” – Laurence Pantin, Justice Transparency Program Coordinator of México Evalúa

CIPE hosted Laurence Pantin and Luis Rubio, both of México Evalúa on March 9 to discuss the ways in which new technological advances are disrupting the judicial sector in Mexico. The conversation focused on the opportunities and challenges these changes bring to Mexican institutions and the lessons for governments across Latin America. New technologies are already changing how citizens engage with the legal sector. Some themes highlighted were artificial intelligence, new browsers to present lawsuits, videoconference applications, electronic files, automatized management systems and geolocation applications.

Future of Work Recommendation:

Governments need to foster policies and regulations that allow the use of new technologies in the judiciary. The need for technology updates in the judicial process should not stop after the pandemic. Governments need to build on the advances that have been made during the past year and allow citizens and employees to benefit from technological changes. Addressing inequalities in access to internet and other tools, would allow all citizens to benefit from these changes equally. (Laurence Pantin)

Watch “Future of Work: The Mexican Judicial Sector’s Experience with Digital Technologies.”

Policy 7: Create flexible regulations to allow the formal sector to adapt to crises.

“During COVID-19, the changing employment practices (such as teleworking) did not have a regulatory framework, which created greater uncertainty amid the crisis.” – David Casasola, Researcher at the Centro de Investigaciones Económicas Nacionales (CIEN)

On December 12, 2020 CIPE brought together David Casasola, a researcher at CIEN, and Luis Oscar Estrada, of the Apparel and Textile Industry Association of Guatemala to discuss how COVID-19 affected the formal economy in Guatemala. Prior to the pandemic over 70% of the Guatemalan workforce worked in the informal sector, a long-term challenge that reduced the government’s ability to respond to the public health crisis. In 2020, Guatemala lost the equivalent of eight years’ worth of formal job creation, due in part to the private sector being unable to adjust to the pandemic’s financial dynamics. Uncertainty and institutional failure further prevented the formal economy from weathering the effects of COVID-19.

Future of Work Recommendation:

To grow the formal economy, government policies must facilitate certainty and structure for business creation. Uncertainty and outdated regulations stifle economic growth, deterring private investment and the formalization of businesses. Stronger institutions, the rule of law, and flexible regulation can encourage formalization and allow businesses to adapt under moments of crisis. (David Casasola)

Watch “Future of Work: Building the Formal Economy in Guatemala after COVID-19.”