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World in 'global jobs crisis'--ILO

January 29, 2009 14:33:00
Veronica Uy

MANILA, Philippines -- The world is now facing a "global jobs crisis" that threatens to add 50 million people to the ranks of the unemployed in 2009, the International Labor Office said Thursday.

Updating its October 2008 estimates, the ILO Global Employment Trends report, released by the agency’s Manila office, said the jobs crisis could also push 200 million workers, mostly in developing countries, into extreme poverty.

"The ILO message is realistic, not alarmist. We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession," ILO Director General Juan Somavia said, as he urged leaders of the world's richest countries to prioritize decent work, productive investments, and social protection, in its agenda when the G-20 countries meet in London on April 2.

In its preliminary estimate, the ILO said 15 to 20 million workers could lose their jobs in 2009.

"The crisis is underscoring the relevance of the ILO Decent Work Agenda. We find many elements of this agenda in current measures to promote job creation, deepening and expanding social protection and more use of social dialogue," he said.

Somavia said if not addressed, the job crisis could give birth to political and security crises.

"Progress in poverty reduction is unraveling and middle classes worldwide are weakening. The political and security implications are daunting," he said.

The ILO chief also called for a tripartite approach to the global financial crisis.

"The Decent Work Agenda is an appropriate policy framework to confront the crisis. There is a powerful message that tripartite dialogue with employers and workers’ organizations should play a central role in addressing the economic crisis, and in developing policy responses," he said.

Somavia reiterated the policy recommendations of the ILO Governing Body in November 2008:

• Wider coverage of unemployment benefits and insurance schemes, equipping redundant workers with new skills, and protecting pensions from devastating declines in financial markets;

• Public investment in infrastructure and housing, community infrastructure and
green jobs, including through emergency public works; support to small and medium enterprises; and

• Social dialogue at the enterprise, sectoral, and national levels.

"If a large number of countries, using their own accumulated reserves, emergency IMF loans and stronger aid mechanisms, put in place coordinated policies in line with the ILO Decent Work Agenda, then the effects of the downturn on enterprises, workers, and their families could be cushioned and the recovery better prepared," Somavia noted.

Since October, the ILO drew three conclusions leading to the updating of its joblessness projection:

One, on the basis of the International Monetary Fund November 2008 forecast, global unemployment rate would rise from 5.7 percent in 2007 to 6.1 percent this year, increasing the number of unemployed by 18 million in 2009 compared with 2007.

The second scenario sees the economic outlook deteriorating beyond what was envisaged in November 2008, which is likely. In this case, the global unemployment rate could rise to 6.5 per cent, or increasing the jobless by 30 million in 2009 compared with 2007.

Lastly, "in a current worst case scenario, the global unemployment rate could rise to 7.1 per cent and result in an increase in the global number of unemployed of more than 50 million people."

Without jobs, the number of working poor who live below $2 a day may increase to 1.4 billion, or 45 percent of the world's employed population.

"In 2009, the proportion of people in vulnerable employment -- either contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship -- could rise considerably in the worst case scenario to reach a level of 53 percent of the employed population," the report said.

Geographically, the highest unemployment rates for 2008 were posted in North Africa (10.3 percent) and the Middle East (9.4 percent), followed by Central and Southeastern Europe (non-European Union) and the Commonwealth of Independent States (CIS) at 8.8 percent, sub-Saharan Africa at 7.9 percent, and Latin America at 7.3 percent.

The ILO said the lowest unemployment rates were in East Asia, at 3.8 percent, followed by South Asia and Southeast Asia and the Pacific, at 5.4 and 5.7 percent, respectively.

It said jobs were still being created in South Asia, Southeast Asia and the Pacific, and East Asia, accounting for 57 percent of global employment creation in 2008.

Net job creation in the Developed Economies and the European Union was negative, minus 900,000.

The ILO reiterated its concern about the social impacts of globalization and again called for support for youth and women workers even as it noted that "a huge labor potential remains untapped worldwide. Economic growth and development could be much higher if people are given the chance of a decent job through productive investment and active labor market policies."

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