As the economy becomes increasingly digital, Latin American youth find themselves at a crossroads marked by economic and social contrasts. Millennials and Generation Z, representatives of an ever-growing workforce, are at the epicentre of the digital transformation, in which inequalities, labour informality and the need to adapt to the rise of artificial intelligence (AI) pose significant challenges.

As Francesco Carella, a regional specialist at the International Labour Organization (ILO) for Latin America and the Caribbean, tells Equal Times, the challenges of the digital era have a profound impact on the economic reality of young people in the region. These challenges range from the protection of workers’ personal data to the urgent need to establish international governance over digital platforms and the regulation of telework and remote work.

In addition, the growing need to acquire digital skills, which was accelerated by the Covid-19 pandemic and impacts young people in particular, requires measures to curb the precariousness of the workforce in a region already affected by high rates of unemployment and labour informality.

“Inequalities in Latin America have a significant impact on the employment situation of young people, particularly within the context of increasing digitalisation and the rise of artificial intelligence,” says Nallely Domínguez, member of the Committee of the Working Youth of the Americas (CJTA) of the Trade Union Confederation of the Americas (TUCA). According to Domínguez, the region is lagging behind in including young people in the labour market. Not only do they face obstacles in finding work, when they do, unlike older workers, the jobs they work tend to be informal or precarious.

According to a report by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), at least 23 per cent of young Latin Americans neither study nor work, while almost 16 per cent of adolescents do not attend school.

In addition, more than 70 per cent of young people who are neither studying nor employed in the labour market are women, a reflection of the socio-economic, educational and gender barriers that restrict opportunities for decent labour market participation.

The rate of unemployment among young people is roughly three times higher than that of older people in most countries in the region. Some 53.4 per cent of young people aged 15 to 29 are also affected by labour informality, which further perpetuates the cycle of poverty and inequality in the region.

According to Domínguez, disparity in access to education in the region deprives many young people of quality training to prepare them for the jobs of the future, especially those linked to technology. Without these digital skills, the future that awaits them is more likely to be one characterised by uncertainty, job insecurity and economic exclusion.

“The digitisation of work can deepen existing inequalities, as those with limited access to technology and digitised education face greater barriers to quality jobs. This can widen the divide between the young people who have access to digital opportunities and those who do not,” she adds.

Precariousness in the digital age, a reality for young workers

“Young people in the region face increasing job intermittency, which can partly be attributed to their constant entry and exit from the labour force. This increased occupational instability is also closely linked to their high level of participation in informal work, which is often characterised by precariousness and low skills,” says the ILO’s Carella.

He warns that this instability compromises young people’s ability to acquire the necessary skills for their professional future, including digital skills. This in turn not only condemns them to having low expectations for their careers but also leaves them more vulnerable.

In Bolivia, for example, a circular from the Centro de Estudios para el Desarrollo Laboral y Agrario (CEDLA) reveals that the majority of economically active young people (52 per cent) are in the informal sector, where they work in precarious jobs with no social protection. Many of them (60 per cent) work strenuous shifts of up to 14 hours a day.

Informal employment leaves young people without basic guarantees and benefits such as health insurance or paid holidays, which makes it difficult for them to plan for the long term and creates insecurity for themselves and their families. It also exposes them to unforeseen events such as sudden illness or job loss, which exacerbates their already precarious situation.

At the same time, digitalisation in the workplace, which intensified during the pandemic, has also raised new questions with regard to labour regulations. Modalities such as teleworking, entrepreneurship and self-employment have gained prominence, attracting the interest of Millennials and Gen Z towards these new workspaces, which pose new challenges.

“If you listen to us as young people, it can often seem that we have bought into the entrepreneurial discourse, with the possibility of choosing schedules and having some autonomy over our time. But this is not necessarily the case,” says Domínguez. According to her, being self-employed does not necessarily mean giving up the rights obtained through the trade union struggle. On the contrary, she argues that these changes “challenge us to reimagine and redefine new labour rights in what is called the ‘4.0 revolution,’ in order to guarantee better conditions for the working class”.

In this sense, telework, for example, emerges as a modality “associated with a relationship of dependence, that is, with a contract or labour relationship between employer and worker. This means that the regulation must take into account both the means of service provision or the technological platform, as well as the place from where the service is performed, whether it’s from a house or a car, etc. But the problem is that there are still many grey areas in the regulation of this modality of telework and remote work,” explains the ILO expert.

Digital divides and AI, new challenges

“Overall, while some young people in Latin America may be well prepared to face the challenges of work digitalisation and artificial intelligence, there is still a long way to go in terms of ensuring that everyone can fight for new rights in this new form of work organisation and have access to the education, training and resources needed to thrive in the digitalised economy,” says Domínguez.

An ILO report says technological transformations could exacerbate the challenges already faced by young Latin Americans in the labour market. Digital divides or limited access to adequate infrastructure will play a key role in their ability to access skilled jobs, particularly in rural areas where digital connectivity is still a distant privilege.

“People in rural areas do not and have not had access to the digital world. They still don’t have access to electricity, they still don’t have access to clean water, they still don’t have access to quality education. So if they don’t have access to these basic things, it’s much more difficult to connect them digitally. Rural youth are much more marginalised. And this is true in all Latin American countries,” explains Mario Andrés Castrillón, vice-president for youth at the Confederation of Colombian Workers.

“In this digital age, we see that young people have a much higher rate of unemployment. We may believe that the digital age should help us to reduce this gap but that has not been the case. Even though young people are more connected than ever to the internet, apps and other [digital] tools, this connectivity is not translating into job opportunities. They spend more time consuming but youth unemployment is still very high in the region,” he says.

The situation that young people face has also been influenced by the advent of AI. While it can improve efficiency in some respects, it can also replace easily automated roles. Given the uncertainty that this creates for the future of employment, young Latin Americans urgently need to develop adaptability and resilience skills that will enable them to cope with a constantly evolving labour market.

“As more young people enter the digital labour market, it’s important to ensure that they have access to decent jobs with fair wages, safe working conditions and adequate social protection. This can be achieved through the promotion of policies and regulations that encourage the formalisation of employment on digital platforms and the effective enforcement of existing labour rights,” says Dominguez.

According to Carella, protecting workers’ personal information is another central aspect. “We know that digital platform companies collect and use a lot of data on workers and customers. Personal data, movement tracking, evaluations, etc. This information is used to refine the platforms’ machine learning algorithms. And if workers do not meet the standards set by that algorithm, it can stop assigning them tasks or even decide to fire them,” he says. Carella emphasises the need to regulate the use of data and establish responsibilities in the regulation of algorithms, which play an increasingly important role in decision-making around labour.

Domínguez also stresses the importance of promoting the active participation of young workers in decision-making processes that affect their labour rights.

To achieve this, she considers it essential to strengthen youth trade union organisations and to promote a more inclusive social dialogue. According to Domínguez, adequately addressing the challenges posed by digitalisation and artificial intelligence in the current era, and thus ensuring fairer access to stable and decent jobs for future generations, can only be achieved “through a collaborative and equitable approach”.