G20 Labour Ministerial meeting - 18-19 July 2013, Moscow

ILO Director-General's remarks at the press conference opening the meeting of G20 Labour and Employment Ministers

Déclaration | Moscow | 17 juillet 2013

Highlights of the joint ILO/OECD press conference ahead of the G20 Labour ministers' meeting
Good morning,

We’re pleased to share with you a statistical update on the labour market in G20 countries, prepared jointly by the ILO and the OECD for the G20 Labour and Employment Ministers’ meeting.

When the Russian Government began its Presidency of the G20, it said that growth and jobs must be high on the agenda of the G20. This document shows that it was right to do so.

Our report points to a seriously worrying situation over the last 12 months, with unemployment up in half of G20 countries and down only marginally in the other half.

In the absence of widespread and sustained growth, unemployment remains at a persistent and unacceptably high level.

It is below 5 per cent in only four countries of the G20: China, India, Japan and Korea; it exceeds 7 per cent in six countries (Canada, France, Italy, Turkey, UK and US) and is over 25 per cent in South Africa and Spain.

In total, 93 million persons are unemployed across G20 countries, a number only slightly above the entire population of Germany.

Structural unemployment and the share of long term unemployment remain above the pre-crisis level in most countries.

Youth unemployment rates are at high levels. In all G20 members (with the exception of Germany and Japan), rates are twice as high as adults’ rates.

Of particular concern is the share of unemployed youth who have been unemployed for 12 months or more, reaching 23.3 per cent on average.

Quality formal employment is lagging behind the increase in the number of job-seekers and informal employment remains very high in emerging economies.

Negative real wage growth was recorded in 2012 in several developed countries, while many emerging economies show a decline in the pace of wage growth.

Income inequality is still very high in many countries.

Against this background, every G20 country is facing a massive jobs challenge.

The IMF has reduced again its global forecast growth for 2013 and 2014.

At low growth rates we will not see significant improvement in the employment situation, and this comes on top of 5 years of world economic downturn.

Therefore the ILO, the IMF, the OECD and the World Bank are united in saying that more attention is needed to employment.

This is the message the ILO brings to this G20 meeting.

Policies can correct this situation; and coordinated policies across the G20 will be even more effective. That was what worked in 2009 and it would work again.

Policies that have a high employment impact will also be those that strengthen demand and hasten economic recovery. They are not the same across all countries, but here are some examples of the type of policies that have been tried with success in the past.

Take infrastructure: most governments work within a tight fiscal space, but they can still promote further investment, particularly in infrastructure, to generate employment across G20 countries. Australia, Brazil, Canada, Indonesia, Japan and South Africa have all invested in infrastructure projects in recent years.

Some countries have enhanced the level and coverage of minimum wages to address working poverty and inequality while contributing to domestic demand. China, Brazil, India and Indonesia are among the countries that have raised minimum wages.

Countries have expanded social protection systems, in fiscally sustainable ways, to increase the resilience of households and to reduce poverty. Basic protection coverage, applying the ILO concept of a social protection floor, has been significantly expanded in China, India, Brazil, and Mexico, among others.

Some countries have developed and strengthened skills development programmes and improved national educational systems and others have facilitated credit availability, especially for SMEs.

Hiring subsidies were introduced successfully in Argentina, Australia, Brazil, Canada, France and the US.

And countries have also put in place special employment programmes directed to specific groups: women, rural workers, and persons with disabilities, again in several countries.

In terms of coverage, an estimated 2.5 per cent of the labour force is benefiting from the measures implemented since 2010. And the average cost of these measures is estimated at just below 1 per cent of GDP.*

Such examples show that G20 countries are implementing a range of measures to generate employment, but the ILO considers that there is room and need to do more in these areas because of the scale of the problem we face, and the urgency involved, and to fulfil the G20’s overall goal of robust, sustainable and balanced economic growth.

When Leaders meet in St. Petersburg in September they will be looking for a menu of options to step up action for employment as a means to strengthen economic recovery. It is exactly that menu of options that we are looking for from the meetings this week.

The experience suggests that high employment levels and inclusive growth can be achieved through a well-designed combination of supportive macroeconomic policies and employment, labour market and social protection policies.

Achieving this will require closer cooperation between Labour and Employment Ministers and Finance Ministers.

This fourth Labour Ministers – and first-ever Labour and Finance Ministers’ – Meeting provides the moment for bold and decisive action.

Thank you.

* 1.5 per cent in emerging economies and 0.4 per cent in advanced economies.