Could a sway to the left in South America be the start of a new Latin step? Alexander Kozul-Wright looks at the partners.

Political change in Latin America’s recent history often resembles waves, as the peak of shifting ideology in one country is followed by a trough in another. The region’s recent swing to the left may not have the same momentum as the “pink tide” that flowed across the continent in the early 2000s (and ebbed out during a conservative backlash in the mid-2010s). But it still represents a region-wide political realignment.

Last month, Colombia elected a left-wing president for the first time. It joins Mexico, Argentina, Bolivia, Peru and Chile in a growing leftist bloc. In Brazil, former president (and left-wing icon) Luis Inacio Lula da Silva is odds on to win next month’s election. Although some left-wing leaders are more socially conservative than others, the latest sweep of elections is a clear indication of shared frustrations in the region.

Piqued by the impact of Covid-19 and the more recent cost of living crisis, angry voters across the continent have turned to political parties that favour enhanced welfare programmes and interventionist governments. The redrawing of political fault lines will have far-reaching consequences on everything from the environment to metals exports, and even monetary policy.

The UK’s economic outlook has been downgraded from “stable” to “negative” by the rating agency Moody’s because of political instability and high inflation.

Moody’s said the change in outlook was driven by “heightened unpredictability in policymaking amid weaker growth prospects and high inflation” and “risks to the UK’s debt affordability from likely higher borrowing and risk of a sustained weakening in policy credibility”.

Rating agencies rate a country on the strength of its economy and provide governments with a score based on the likelihood that they will be able to pay back debt.

Tragedy struck recently in my friend’s kindergarten class. Savanah, the single, working grandmother of Davey, one of the most disadvantaged students in the class, died suddenly. She was Davey’s primary carer and had recently stopped working to help him, as he was having a hard time in school and had already been removed from his mother, who is not capable of looking after him and his sister. Had Savanah had some help, perhaps from a government-funded care worker, she may not have succumbed to stress and exhaustion.

A few months before she died, Savanah expressed a simple wish for Davey: “I just hope he can live a normal life,” she brooded, “and have a job.” A simple wish indeed, but one that is becoming increasingly elusive for many young people, particularly disadvantaged ones like Davey, because of labour underutilisation policies – a hallmark of neoliberalism.

Like many others, Davey’s kindergarten class provides play-based education. The children draw, garden, make crafts, and bake cookies, all with an emphasis on having fun and caring for each other and their environment. The school-to-work transition and the focus on developing employability skills seems ages away. Yet, given the high, and rising rates of youth un- and underemployment worldwide, our systems of secondary education, and increasingly tertiary ones too, have become increasingly aimed at job-readiness and conferring employability skills.

As Davey and his classmates progress through school, they will approach what academics call the school-to-work transition. Beginning in high school, as this transition approaches, the purpose of education will, for most students, become increasingly aimed at conferring employability skills. Job-readiness will become a growing concern, and why shouldn’t it when youth un- and underemployment is high and rising, fomenting a competitive labour market. But since unemployment is a political choice, not an economic necessity, what can be done?

The answer could lie in the post-war period when every Western government pursued, successfully, a full employment policy and where, with few exceptions, anyone who wanted a job could find work. This continued until the 1970s and the onset of neoliberalism, since which time governments have chosen to use unemployment as a tool to curb inflation.

The rationale for this policy is that when jobs are plentiful and the economy is operating at full employment, workers will ask for higher wages confident that they will not be laid off, or they can easily find work elsewhere. In turn, businesses raise their prices leading to a wage-price spiral. So, by keeping a sufficiently high number of people unemployed, workers feel insecure and do not ask for higher wages. Indeed former Federal Reserve chairman, Alan Greenspan, cited “worker insecurity” for the US’s low inflation in the mid-1990s.