El Niño Could Turn a Climate Shock Into a Regional Jobs Crisis

The International Labour Organization has warned that the 2026–2027 El Niño could disrupt employment, reduce incomes and worsen working conditions across Latin America and the Caribbean. The alert highlights how climate shocks can spread through food systems, energy markets and transport networks before reaching workers, especially those in informal, rural and outdoor employment.

The 2026–2027 El Niño could become a major labour market challenge for Latin America and the Caribbean, disrupting work and incomes across sectors that depend heavily on stable weather, water supplies and functioning infrastructure.

In a new policy brief, the International Labour Organization (ILO) warns that changing rainfall patterns, droughts, floods, heatwaves and severe storms could affect agriculture, fisheries, energy, transport, logistics and tourism. Because these industries support millions of workers, disruption could spread well beyond the locations directly hit by extreme weather.

A Weather Event With a Labour-Market Fuse

El Niño's economic impact rarely stops at the point where drought destroys a crop or flooding blocks a road. Climate disruption can move through several layers of an economy before its full effect becomes visible in employment data.

Lower agricultural production can reduce demand for farm labour while raising food prices. Flooded roads and damaged infrastructure can interrupt transport and logistics, delaying goods and increasing business costs. Water shortages can place pressure on energy production, while storms can weaken tourism by damaging facilities, restricting travel or discouraging visitors.

Each disruption creates consequences for workers. Some may lose jobs, while others may see working hours cut, incomes reduced or employment conditions deteriorate. Businesses facing higher costs may postpone hiring or reduce activity, while workers exposed to heatwaves and severe weather may confront greater health and safety risks.

This is why the ILO is urging policymakers to look beyond emergency disaster response. By the time job losses become visible, the chain of disruption may already have moved from farms and infrastructure into household budgets and consumer prices.

The labour-market threat is particularly important because the effects can continue after the weather event has passed. Damaged productive assets, weakened businesses and lost income can slow recovery, especially in communities with limited access to finance, insurance and public support.

One Region, Three Climate Fronts

The 2026–2027 El Niño is unlikely to affect Latin America and the Caribbean in a uniform way. Different subregions may face contrasting weather patterns, requiring governments to prepare for several kinds of emergency at once.

The Central American Dry Corridor, the Caribbean and northern South America are expected to face heightened risks of drought and water shortages. These conditions could place agricultural workers, fishers and rural communities under particular pressure, especially where employment and household incomes depend on natural resources.

Ecuador and Peru could experience intense rainfall and flooding. In these countries, the labour impact may emerge through damaged infrastructure, disrupted transport, suspended commercial activity and lost working days.

Southeastern South America may face heavier-than-normal rainfall and damaging storms, raising concerns for workplaces, roads, logistics networks and communities located in exposed areas.

These differences make regional coordination valuable but limit the usefulness of a single policy response. A programme designed to support farmers during drought may not meet the needs of transport workers affected by flooding. Heat protections for outdoor workers will require different interventions from those needed to restore damaged roads or stabilise food supplies.

National preparedness will depend on how accurately governments connect climate forecasts with local labour-market conditions. Authorities will need to identify which sectors employ the most exposed workers, where social protection coverage is weakest and which supply chains could transmit local disruption across the wider economy.

Informality Turns Lost Work Into Household Crisis

Nearly half of all workers in Latin America and the Caribbean earn their living in the informal economy, according to the ILO. For these workers, the difference between a difficult climate event and a financial emergency may be a single day without income.

Informal workers often lack unemployment benefits, paid leave, insurance and reliable access to financial assistance. When floods close a market, drought reduces agricultural work or storms keep tourists away, earnings can disappear immediately. A salaried worker may retain some income during a temporary interruption. A street vendor, seasonal farmworker, small-scale fisher or casual tourism employee may have no comparable protection. The result is an unequal distribution of climate risk, with those least equipped to absorb disruption often facing the fastest and deepest losses.

The danger grows when falling income is combined with rising prices. El Niño-related pressure on food and energy supplies could fuel inflation and worsen food insecurity, placing low-income households under a double strain. Families may earn less while paying more for essential goods.

Under severe financial pressure, households may reduce food consumption, take on debt or seek additional income from other family members. The ILO has warned that the risk of child labour could increase in the most vulnerable communities as families struggle to compensate for lost earnings.

This link between climate disruption, informality and household insecurity exposes a longstanding policy weakness. Social protection programmes are often built around formal employment records, leaving governments with fewer reliable ways to identify and support workers operating outside registered payroll systems.

Protecting informal workers will therefore require more than temporary funding. It will demand delivery systems capable of reaching people whose employment is irregular, undocumented or spread across seasonal and daily activities.

Preparedness Is the Only Real Shock Absorber

ILO Deputy Regional Director for Latin America and the Caribbean Fabio Bertranou has stressed that the consequences of El Niño are not predetermined. Their severity will depend heavily on how governments, employers and workers prepare.

The ILO recommends expanding social protection, investing in climate-resilient infrastructure, strengthening workplace health and safety, improving early warning systems and using social dialogue to develop responses that reflect national conditions.

These measures target different stages of the crisis. Early warning systems can give communities and businesses more time to protect assets, alter schedules or prepare for disruption. Resilient infrastructure can reduce damage to transport, energy and production networks. Workplace protections can help reduce exposure to dangerous heat and severe weather.

Social protection can prevent temporary income losses from pushing households deeper into poverty or food insecurity. But its effectiveness will depend on speed, coverage and accessibility, particularly for informal and rural workers.

Employers will also have a major role. Businesses may need to adjust working hours during extreme heat, strengthen emergency procedures and prepare continuity plans for disruptions to energy, transport and supplies. Governments, meanwhile, will need to balance immediate relief with longer-term investment in infrastructure and labour-market resilience.

The most important developments to watch will be the introduction of country-level preparedness plans, the expansion of early warning coverage and the creation of income-support mechanisms that can reach informal workers. Food and energy prices, working-hour losses and signs of worsening household insecurity will also provide early evidence of how deeply the climate shock is spreading.