Starting in East Asia then coming over to Brazil then engulfing the whole Latin America area, poor economy has brought unemployment and poverty to an all time high. Many speculate that the reason for a down fall in the Latin America economy may be because of the emerging markets. Now expectations have decreased for Latin America. World Bank estimates that Latin America 2009 growth potential will decrease from 4.2 percent to between 2.5 and 3.5 percent.

The decrease in growth potential will mainly affect two areas for the Latin America economy; the credit market and commodity prices. Latin America is one of the main suppliers for commodities to the rest of the world. Since people will always demand goods, all Latin America can do is wait out the storm.

Latin America’s has an extremely hard time holding a credit pool. Since South America is divided up by mountains, jungles, and rivers, transporting goods is extremely difficult. So South America has depended to heavily on foreign credit to build roads for easier transport of commodities. Since the 1982 debt crisis, Latin America still experiences heavy debt to this day.

Unemployment has only risen since the debt crisis in 1982, also called “the lost decade.” Overall, unemployment has risen up 10% since 1990. Argentina current unemployment rate is 19.7% and in Uruguay it is 17%. And since now more and more Natives are without jobs, the people below the poverty line has increased.

“According to Panorama Laboral, 19 million workers were unable to find work in 2003 despite regional economic growth of 1.5 per cent of the GDP. The report said labor market performance was weak during the past year, with unemployment reaching 10.7 per cent – or nearly the same as in 2002 when it was pegged at 10.8 percent. What is more, the report also said that even an accelerated growth rate of 3.5 percent in 2004 would fail to reduce unemployment significantly.” (

Argentina and Uruguay population about 40%-30% are below the poverty line. The main countries that experienced the greatest impact on unemployment were Brazil, Chile, Colombia, and Peru. The terrible rise in unemployment has also developed terrible child labor practices. (

Child labor in Latin America is now a large concern with law official and child right activists. “The study found that, after begging, the most common forms of child labor included street performers (14 percent), children who work as cartoneros, helping their parents scavenge through trash for recyclables (11 percent), and children selling things in bars, mass transit or the streets (4 percent).” (

It’s hard to write what Latin America needs to do in words, but here are some given suggestions. The number one thing would be creating more stainable jobs for blue collar workers. Jobs are not that easily created in a weak economy though. Another thing would be to strengthen the relationship between the government and workers. Mexico and other Latin American countries are known for protests due to bad working condition and poor pay. Minimum wage is quite low in Mexico, only a few pesos a day.

Link to a graph of Latin American countries unemployment rates (male vs. female).