Friday, August 20, 2010

Unemployment: Global unemployment hovering at 210 million

By Brenda Sorensen
Courtesy of IDN-InDepth NewsAnalysis

Photo: ILO Director-General Somavia and IMF Managing Director Strauss-Kahn | Credit: ILO

OSLO (IDN) - Thirty-four million more people worldwide have been thrown out of job since the eve of the global financial crisis in 2007 and the ensuing recession, which have had devastating consequences for employment and poverty reduction.

Global unemployment in 2010 is hovering at some 210 million people. According to estimates by the International Labour Organization (ILO), the outlook continues to worsen.

The World Bank estimates that up to 60 million people may have been pushed into severe poverty in the low-income countries as a result of the crisis, setting back recent efforts to improve living standards.

Global media attention to the economic downturn has focused on the advanced economies, where jobless rates have risen sharply since 2008. However, the consequences of unemployment and underemployment can also be very severe in developing counties, because they often can provide less social protection to support basic living standards.

Combating unemployment and striving to attain decent work for all must therefore be a key priority as the global economy emerges from the downturn, as the International Labour Organization (ILO) points out. With this in view, the ILO is joining hands with the International Monetary Fund (IMF) to organize a conference on September 13, 2010 in Oslo. It will be hosted by the Prime Minister of Norway, Jens Stoltenberg.

The conference titled 'The Challenges of Growth, Employment and Social Cohesion', is the first of its kind. It will explore new ways of forging a sustainable, job-rich recovery from the global economic crisis.

ILO argues that high unemployment and underemployment have high economic and social costs that -- unless addressed -- have the potential to drain the vitality out of any recovery. The great risk is that short-term job losses become long-term unemployment, producing a progressive loss of workers’ skills and exclusion from the productive economy.

In such circumstances, demand can languish and the economy can become trapped in a cycle of stagnant growth and high unemployment. Increasing economic dislocation and marginalization can undermine social cohesion -- carrying with it dangers to peace and stability.

"In developing countries, crisis pervades the daily life of the poor," said ILO Director-General Juan Somavia. "The effects of the economic and financial crisis threaten to exacerbate the pre-existing decent work deficits among youth. The result is that the number of young people stuck in working poverty grows and the cycle of working poverty persists through at least another generation."

ILO said in a report on August 11 that of some 620 million economically active youth aged 15 to 24 years, 81 million were unemployed at the end of 2009 -- the highest number ever. This is 7.8 million more than the global number in 2007. The youth unemployment rate increased from 11.9 percent in 2007 to 13.0 percent in 2009.

It added that these trends will have "significant consequences for young people as upcoming cohorts of new entrants join the ranks of the already unemployed" and warns of the "risk of a crisis legacy of a ‘lost generation’ comprised of young people who have dropped out of the labour market, having lost all hope of being able to work for a decent living".

According to the ILO projections, the global youth unemployment rate is expected to continue its increase through 2010, to 13.1 per cent, followed by a moderate decline to 12.7 per cent in 2011. The report also points out that the unemployment rates of youth have proven to be more sensitive to the crisis than the rates of adults and that the recovery of the job market for young men and women is likely to lag behind that of adults.
The report indicates that in developed and some emerging economies, the crisis impact on youth is felt mainly in terms of rising unemployment and the social hazards associated with discouragement and prolonged inactivity.

The ILO report points out that in developing economies, where 90 per cent of young people live, youth are more vulnerable to underemployment and poverty. According to the report, in the lower income countries, the impact of the crisis is felt more in shorter hours and reduced wages for the few who maintain wage and salaried employment and in rising vulnerable employment in an ‘increasingly crowded’ informal economy.

The report estimates that 152 million young people, or about 28 percent of all the young workers in the world, worked but remained in extreme poverty in households surviving on less than US$1.25 per person per day in 2008.

The conference will bring together senior government officials, labour and business leaders, and well-known economists to address the possible long-term and short-term responses to the employment crisis. IMF Managing Director Dominique Strauss-Kahn and ILO Director General Juan Somavia will chair the conference.

Among the international figures that have already accepted speaking invitations are: President Ellen Johnson Sirleaf of Liberia, Prime Minister George Papandreou of Greece, Prime Minister Jose Luis Rodriguez Zapatero of Spain, Finance Minister Christine Lagarde of France, U.K. Secretary of State for Labour Iain Duncan Smith, and International Trade Union Confederation General Secretary Sharan Burrow.

The conference will focus on both short and long-term policy measures. The short-term measures—to be addressed during a morning roundtable discussion -- consider the human cost of the financial crisis and how to ease the burden of joblessness.

The second roundtable, in the afternoon, will focus on the longer-term policy measures, and address new strategies to kick-start vibrant employment growth and make markets work more for people. It will discuss wage policies, education and training, support to smaller enterprises and 21st century social protection. By bringing together a diverse group of speakers and participants, the conference will seek to define global solutions relevant to all regions.

"I very much look forward to welcoming world leaders and representatives of agencies and academic institutions to Oslo on 13 September to discuss the topical issue of unemployment,” Prime Minister Jens Stoltenberg of Norway said. “We need the right policies to ensure a sustainable, job-rich recovery. The Oslo conference offers an arena for key policy makers and experts to explore ways to improve the quality of life and work for the millions of people affected by the financial crisis.”

The IMF and ILO, with the participation of the senior leaders from governments, labour and the private sector, as well as prominent academics, will discuss near-term policy responses to the steep rise in unemployment as well as ways to promote sustainable growth and development.

Prior to the conference, a discussion paper for the conference roundtables, with contributions authored, respectively, by the IMF and the ILO, and addressing many of the conference issues, will be made available for review and online discussion. (IDN-InDepthNews/19.08.2010)