World Employment and Social Outlook – Trends 2016

ILO World Employment and Social Outlook (WESO) – Trends 2016

Despite falling unemployment levels in some developed economies, new analysis shows the global job crisis is not likely to end, especially in emerging economies.

Press release | 20 January 2016

Slowdown of global economy and increase of global unemployment in 2016 and 2017

ILO’s latest WESO report projects the world economy to grow by only around 3 per cent, significantly less than before the advent of the global crisis. The weakening economic growth will add 2.3 mio jobless to the global tally in 2016 and another 1.1 million in 2017 – resulting in a global unemployment that is over 30 million higher than the pre-crisis level of 2007.

“Many working women and men are having to accept low paid jobs, both in emerging and developing economies and also, increasingly in developed countries. ... We need to take urgent action to boost the number of decent work opportunities or we risk intensified social tensions,” says ILO Director-General Guy Ryder.

The global challenges presented in the WESO report will be further discussed by the G20 in 2016 under the Chinese Presidency. Under the theme of the Summit “Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy”, the agenda for G20 in 2016 includes four baskets of priorities: 1) breaking a new path for growth; 2) more effective and efficient global economic and financial governance; 3) robust international trade and investment; and 4) inclusive and interconnected development. China’s G20 Presidency recognizes that it is the imperative to revive global growth by addressing both the symptoms and root causes of the challenges facing by the global economy.

China’s slower growth, coupled with a prolonged slump in commodity prices, have weighted on the region’s growth

In 2015 China’s economic growth dropped below 7 per cent (to 6.8 per cent) for the first time in more than two decades. As China ramps up investment in technology-intensive manufacturing and shifts its focus further towards services and higher value-added sectors, there will be new opportunities available in the country and for its trading partners, particularly ASEAN economies. China’s One Belt, One Road initiative to rebuild Silk Road trade links will likely help mitigate job losses in China’s construction sector, while also propping up demand for raw materials, boosting infrastructure development and generating jobs in the region.

A major risk to the region’s economic outlook, and therefore its employment and social outlook, in 2016 is the degree to which the region’s major commodity exporters can compensate for reduced export demand from China. Developing and emerging markets in Asia and the Pacific are also expected to face capital outflows and volatility in financial markets, because of a further easing in US monetary policy. This is likely to result in reduced FDI and tighter financial conditions in the region, hampering business creation and expansion.

Decent work at the heart of sustainable development

The United Nations’ newly adopted 2030 Agenda for Sustainable Development comprised mainly by Sustainable Development Goals (SDGs) and the Addis Ababa Action Agenda on Financing for Development, stresses the key role of decent work in ensuring inclusive economic growth as well as its contribution to enhancing social and environmental outcomes. Decent work is now brought to the forefront with SDG 8: “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”. Decent work is a universal concern, and SDG 8 will provide a further impetus to address the root causes of poverty and inequality in developed, emerging and developing countries alike.

“The lack of decent jobs leads people to turn to informal employment, which is typically characterized by low productivity, low pay and no social protection. This needs to change. Responding urgently and vigorously to the scale of the global jobs challenge is key to successful implementation of the United Nations’ newly adopted 2030 Agenda for Sustainable Development,” concludes Ryder.

During China’s Presidency, G20 Leaders are set to align G20 work with the 2030 Agenda. A G20 Action Plan will bring together developing and developed countries representing three-quarters of global trade, two-thirds of FDI, 85 percent of global GDP and half of the world’s poor and aim to take collective action for global public goods, inclusive growth and development.