World of Work Report 2011:
World heading for a new and deeper jobs recession - ILO
The World of Work Report 2011- ILO says world heading for a new and
deeper job recession, warns of more social unrest GENEVA (ILO News).
In a grim analysis issued on the eve of the G20 leaders summit, ILO
says the global economy is on the verge of a new and deeper jobs
recession that will further delay global economic recovery and may
ignite more social unrest in scores of countries.
We have reached the moment of truth. We have a brief window of
opportunity to avoid a major double-dip in employment, said Director of
the ILO International Institute for Labour Studies Raymond Torres.
The report says a stalled global economic recovery has begun to
dramatically affect labour markets. On current trends, it will take at
least five years to return employment in advanced economies to
pre-crisis levels, one year later than projected in last year’s report.
Noting that the current labour market is already within the confines
of the usual six-month lag between an economic slowdown and its impact
on employment, the report indicates that 80 million jobs need to be
created over the next two years to return to pre-crisis employment
rates. However, the recent slowdown in growth suggests that the world
economy is likely to create only half of the jobs needed.
The report also features a new “social unrest” index that shows
levels of discontent over the lack of jobs and anger over perceptions
that the burden of the crisis is not being shared fairly. It notes that
in over 45 of the 119 countries examined, the risk of social unrest is
rising.
This is especially the case in advanced economies, notably the EU,
the Arab region and to a lesser extent Asia. By contrast, there is a
stagnant or lower risk of social unrest in Sub-Saharan Africa and Latin
America.
The study shows that nearly two-thirds of advanced economies and half
of emerging and developing economies with recent available data are
again experiencing a slowdown in employment. This comes on top of an
already precarious employment situation in which global unemployment is
at its highest point ever, surpassing 200 million worldwide.
The report cites three reasons why the ongoing economic slowdown may
have a strong impact on the employment panorama: first, compared to the
start of the crisis, enterprises are now in a weaker position to retain
workers; second, as pressure to adopt fiscal austerity measures mount,
governments are less inclined to maintain or adopt new job- and
income-support program; and third, countries are left to act in
isolation due to lack of international policy coordination.
The report’s other main findings include:
* Approximately 80 million net new jobs will be needed over the next
two years to re-attain pre-crisis employment rates (27 million in
advanced economies and the remainder in emerging and developing
countries).
* Out of 118 countries with available data, 69 countries show an
increase in the percentage of people reporting a worsening of living
standards in 2010 compared to 2006.
* Respondents in half of 99 countries surveyed say they do not have
confidence in their national governments.
* In 2010, more than 50 percent of people in developed countries report
being dissatisfied with the availability of decent jobs (in countries
such as Greece, Italy, Portugal, Slovenia, and Spain, more than 70
percent of survey respondents reported dissatisfaction).
* The share of profit in GDP increased in 83 percent of the countries
analysed between 2000 and 2009. Productive investment, however,
stagnated globally during the same period.
* In advanced countries, the growth in corporate profits among
non-financial firms were translated into a substantial increase in
dividend payouts (from 29 percent of profits in 2000 to 36 percent in
2009) and financial investment (from 81.2 percent of GDP in 1995 to
132.2 percent in 2007). The crisis reversed these trends slightly which
resumed in 2010.
* Food price volatility doubled during 2006-2010 relative to the
preceding five years, affecting decent work prospects in developing
countries. Financial investors benefit more from price volatility than
food producers, especially small ones.
The report calls for maintaining and in some cases strengthening
pro-employment program, warning that efforts to reduce public debt and
deficits have often disproportionately focused on labour market and
social measures.
For example, it shows that increasing active labour market spending
by only half a percent of GDP would increase employment by between 0.4
percent and 0.8 percent, depending on the country.
The study also calls for supporting investment in the real economy
through financial reform and pro-investment measures. Finally, it says
that the adage that wage moderation leads to job creation is a myth, and
calls for a comprehensive income-led recovery strategy. This would also
help stimulate investment while reducing excessive income inequalities.
|