Global Employment Trends 2014
"Weak economic recovery does not extend to jobs"
The weak global economic recovery has failed to lead to an improvement in global labour markets, with global unemployment in 2013 reaching almost 202 million, the ILO said in a new report.
The weak global economic recovery has failed to lead to an improvement in global labour markets, with global unemployment in 2013 reaching almost 202 million, the ILO said in a new report.
The Global Employment Trends 2014 report said employment growth remains weak, unemployment continues to rise, especially among young people, and large numbers of discouraged potential workers are still outside the labour market.
Global recovery in labour markets is being held back by a deficit of aggregate demand. The report found that in many advanced economies, the fiscal consolidation currently in action hinders faster expansion of output growth. In addition, the accommodative monetary policy of many countries has not led to substantial investment in the real economy as liquidity mainly goes into asset markets, damaging long-term employment prospects.
On current trends, around 40 million new jobs could be created every year until 2018, which is less than what is required to absorb the growing number of new entrants into the labour market each year.
“What is urgently needed is a policy re-think. Stronger efforts are needed to accelerate employment creation and to support enterprises that create jobs,” said ILO Director-General Guy Ryder.
The report stressed the pressing need to integrate young people into the labour force. At present, some 74.5 million men and women under the age of 25 are unemployed, a global youth unemployment rate of over 13 per cent – over two times more than the overall global unemployment rate.
In developing countries, informal employment remains widespread, and the pace of improvements in job quality is slowing down. That means fewer people are moving out of working poverty. In 2013, the number of workers in extreme poverty – living on less than US$ 1.25 a day – declined by only 2.7 per cent globally, one of the lowest rates over the past decade, with the exception of the immediate crisis years.
In many developed economies, harsh reductions in public spending and hikes in income and consumption taxes weigh heavily on private businesses and households.
In addition, a lack of policy coordination between monetary and fiscal policies has substantially increased labour market uncertainty, with employers often reluctant to hire or make long-term investments.
Unemployment has lengthened considerably. In some countries such as Spain and Greece, jobseekers need twice as much time before landing a new job than before the crisis. And, more and more of those potential workers are discouraged and remain outside the labour force, leading to skills degradation and obsolescence, and rising long-term unemployment, said Ekkehard Ernst, a main author of the report.
“With 23 million people estimated to have dropped out, it is imperative that active labour market policies be implemented more forcefully to address inactivity and skills mismatch,” said Ernst, who heads the Employment Trends Unit at the ILO Research Department.
A switch to more employment-friendly policies and rising labour income would boost economic growth and job creation, the report says. In emerging and developing countries, it is crucial to strengthen social protection floors and promote transitions to formal employment. This too would support aggregate demand and global growth.
For more information, please check www.ilo.org/get2014.
The Global Employment Trends 2014 report said employment growth remains weak, unemployment continues to rise, especially among young people, and large numbers of discouraged potential workers are still outside the labour market.
Global recovery in labour markets is being held back by a deficit of aggregate demand. The report found that in many advanced economies, the fiscal consolidation currently in action hinders faster expansion of output growth. In addition, the accommodative monetary policy of many countries has not led to substantial investment in the real economy as liquidity mainly goes into asset markets, damaging long-term employment prospects.
On current trends, around 40 million new jobs could be created every year until 2018, which is less than what is required to absorb the growing number of new entrants into the labour market each year.
“What is urgently needed is a policy re-think. Stronger efforts are needed to accelerate employment creation and to support enterprises that create jobs,” said ILO Director-General Guy Ryder.
Global Employment Trends: Facts and figures
- The number of unemployed worldwide rose by 5 million in 2013 to over 202 million, a 6 per cent unemployment rate.
- Some 23 million workers have dropped out of the labour market.
- The number of jobseekers is expected to rise by more than 13 million by 2018.
- Some 74.5 million people in the 15 to 24 age group were unemployed in 2013, a 13.1 per cent youth unemployment rate.
- Around 839 million workers lived with their families on less than US$ 2 in 2013.
- Some 375 million workers lived with their families on less than $1.25 a day in 2013.
Youth unemployment remains a major concern
The report stressed the pressing need to integrate young people into the labour force. At present, some 74.5 million men and women under the age of 25 are unemployed, a global youth unemployment rate of over 13 per cent – over two times more than the overall global unemployment rate.In developing countries, informal employment remains widespread, and the pace of improvements in job quality is slowing down. That means fewer people are moving out of working poverty. In 2013, the number of workers in extreme poverty – living on less than US$ 1.25 a day – declined by only 2.7 per cent globally, one of the lowest rates over the past decade, with the exception of the immediate crisis years.
In many developed economies, harsh reductions in public spending and hikes in income and consumption taxes weigh heavily on private businesses and households.
In addition, a lack of policy coordination between monetary and fiscal policies has substantially increased labour market uncertainty, with employers often reluctant to hire or make long-term investments.
Unemployment has lengthened considerably. In some countries such as Spain and Greece, jobseekers need twice as much time before landing a new job than before the crisis. And, more and more of those potential workers are discouraged and remain outside the labour force, leading to skills degradation and obsolescence, and rising long-term unemployment, said Ekkehard Ernst, a main author of the report.
Global Employment Trends at a glance: European Union and Developed Economies
- Signs of recovery in economic activity have appeared and strengthened in the European Union and the Developed Economies region throughout 2013.
- But improvements, both in productivity and competitiveness, have not yet been strong enough to make a difference to the still large and rising employment gap: labour market conditions showed no signs of improvement during 2013, the region is characterized by a recovery in activity, not in jobs.
- The unemployment rate increased again in 2013 to 8 per cent or 45.2 million people before being expected to gradually slide back to below 8 per cent around 2018.
- Long-term unemployment is on the rise as labour market mismatch increases.
- Quality of employment in most countries of the region has deteriorated as the incidence of involuntary temporary and part-time employment, in-work poverty, informal work, job and wage polarization and income inequality have further increased.
- The lacklustre recovery is partly caused by the continued pursuit of austerity policies in the region.
- There is the risk that monetary and fiscal policies continue to be uncoordinated as fiscal austerity is met with unconventional and accommodative liquidity creation by central banks in the United States, the Euro area and Japan.
“With 23 million people estimated to have dropped out, it is imperative that active labour market policies be implemented more forcefully to address inactivity and skills mismatch,” said Ernst, who heads the Employment Trends Unit at the ILO Research Department.
A switch to more employment-friendly policies and rising labour income would boost economic growth and job creation, the report says. In emerging and developing countries, it is crucial to strengthen social protection floors and promote transitions to formal employment. This too would support aggregate demand and global growth.
For more information, please check www.ilo.org/get2014.