Jobs and the millennium generation: Working out of poverty

At the recent World Summit of the UN General Assembly, over 150 Heads of State approved a historic Outcome Document stating: "We strongly support fair globalization and resolve to make the goal of full and productive employment and decent work for all... a central objective." This represents important worldwide support at the highest level for the ILO's Decent Work Agenda as a prime motivator in poverty reduction under the Millennium Development Goals (MDGs) and should serve as a guiding force for national and international development policies. In the article below, ILO Director-General Juan Somavia provides a new agenda for tackling poverty and creating jobs. In the series of articles that follow, World of Work reviews some significant efforts by the ILO in this regard.

GENEVA - The world is full of working poor. But these people are not poor because they do not work - they are poor because they cannot earn enough money.

It has become clear that current policy prescriptions for tackling poverty, enhancing people's security and making the world a safer, more prosperous and fairer place to live aren't producing the desired results.

Roughly half the world's population still scrapes together a bare-bones existence on the equivalent of about US$2 a day. And in too many places, having a job doesn't guarantee the ability to escape from poverty. This slow and uneven progress mandates us to rethink and retool our economic and social policies aimed at halving world poverty by 2015 (the Millennium Development Goals). This responsibility can be summarized in a single phrase: working out of poverty.

We have not done enough to lay the foundations of peace by significantly reducing poverty, finding new ways to expand decent work and developing viable, job-producing enterprises.

Individuals, families and communities have a right to expect those in positions of public and private authority to come up with a set of policies that give them a fair chance at a decent job.

What does this entail? Right now, and for the foreseeable future if present trends hold, there are simply far too few new jobs for the growing world labour force and for those displaced by the fast pace of structural change that accompanies globalization. We are facing a global jobs crisis.

Although many new jobs have been created, the fact remains that the official unemployment has grown by 26 per cent in the last ten years. Yet, these figures mask the larger problem of underemployment and the billions of people who are unable to work in ways that maximize their productive potential.

Far too many people - especially women - are still underemployed or unable to obtain productive decent work. And the greatest failure of the current system concerns young people.

In fact, the real meaning of "MDG" may be the Millennium Development Generation, the world's one billion or more youth who face the prospect of unemployment and underemployment for years to come. Nearly 40 per cent of the world's population today is below the age of 20. Eighty-five per cent of young people are in developing countries where many live and work under conditions of poverty and inequality of opportunity.

The ILO estimates that nearly 86 million young people worldwide are jobless, accounting for 45 per cent of the world's unemployed. The global unemployment rate among youth is 13.8 per cent, up from 11.7 per cent a decade earlier. Throughout the world, young people are on average over three times more likely to be unemployed than adults. In addition, millions more cannot afford to be unemployed and are working long hours for low pay and eking out a living in the "informal economy". Yet most countries face an even more daunting challenge. For how can we find work for the young if we cannot even produce enough work for the adult workforce?

Latest ILO data shows that even strong economic growth has failed to generate a commensurate number of jobs. In 2004, for example, a healthy 5.1 per cent global economic growth rate resulted in a disappointing 1.8 per cent increase in the number of employed people. Simply put, trillions of dollars in growth produced just a trickle of jobs.

Considering that the global labour force will grow by over 400 million by 2015, even rapid employment growth of 40 million jobs per year would reduce the global unemployment rate by only over 1 percentage point in ten years.

Meeting the global employment challenge requires not just more but also better jobs. The majority of people in developing countries live and work in the back alleys of the marketplace, in the so-called informal economy. These are the workers who toil in the fields, on the streets and in other informal workplaces. Unprotected by law, they and their families subsist in precarious conditions.

We can do better and the global community took a significant step in the right direction at September's United Nations World Summit in New York where world leaders unanimously stated that they "strongly support fair globalization and resolve to make the goals of full and productive employment and decent work for all…a central objective of our relevant national and international policies." This represents a global commitment at the highest level to move forward on job creation.

Creating decent work opportunities through growth, investment and higher productivity provides the greatest potential for addressing the challenge. We can devise new approaches that give the working poor a chance to progressively become the working prosperous.

Poverty breeds a sense of powerlessness and indignity. Yet we must realize that people living in conditions of material deprivation also represent enormous reserves of courage, ingenuity, persistence and mutual support. Simply coping with poverty - and billions do it every day - demonstrates the resilience and creativity of the human spirit.

Imagine what could be accomplished if we could unleash these reserves. A successful drive to raise entrepreneurship, productivity and consuming power of the majority of the world's population, particularly those on the lowest incomes, is fundamental to the broadening and deepening of markets - the lifeline of enterprise and employment-rich growth.

How to do it? We have to begin by changing the policy paradigm to recognize that employment, and the promotion of enterprises that create jobs, is the most effective route to poverty eradication. The goal of a stable and prosperous world economy is possible only if the productivity and consuming power of all its citizens are realized to begin with, in local markets where people live.

Work is presently the missing link in the efforts to reduce poverty. Most policy prescriptions fail to view job creation as an explicit objective, seeing it rather as a hoped-for result of sound macroeconomic policies. While sound macroeconomic policies are of course essential to set the stage for desired growth, the key is ensuring that growth is balanced and employment-rich - in other words, that it creates as many decent jobs as possible.

Can we achieve this overall objective? We must. Let us rededicate ourselves to focusing on investment and entrepreneurship, employment, income generation and decent work for all. Let us strive to make sure that globalization is fair, and that it delivers its benefits to all, not just the few. Let us pursue a vision of political and social stability based on the prospect of prosperity for those who can and will work for it. If the international community, working together, can just deliver the convergence of policies that will allow every woman and man - no matter what their age - to work their way out of poverty, the rest will follow.

When so many are talking about UN reform, this is the "real life" reform that workers and their families all over the world are waiting for. Let's deliver it.

Millennium Development Goals in Asia and the Pacific: Mixed progress but hopeful signs

Despite encouraging results in cutting poverty and improving the working lives of people in Asia, in 2005 unemployment in the region was at a record high while job growth remained "disappointing". Still, a new ILO report (Note 1) issued on the eve of the United Nations World Summit also notes that Asia has made "huge strides" towards achieving the Millennium Development Goals (MDGs).

BANGKOK - According to the report, the creation of new jobs has failed to keep pace with Asia's impressive economic growth. Between 2003 and 2004, employment in Asia and the Pacific increased by a "disappointing" 1.6 per cent, or by 25 million jobs, to a total of 1.588 billion jobs, compared to the strong economic growth rate of over 7 per cent.

During the same period, the total number of unemployed edged up by half a million reaching 78 million, the fifth consecutive year-on-year increase since 1999. In addition, underemployment remains widespread: millions are working involuntarily less than full time or are taking jobs below their qualifications or skills.

Young people aged 15 to 24 are bearing the brunt of this employment deficit, the report says, accounting for a disproportionate 49.1 per cent of the region's jobless although they make up only 20.8 per cent of the labour force. Moreover, there is a cruel irony in the co-existence of youth unemployment with child labour: millions of young people are jobless or underutilized while many jobs are filled by children who should be attending school.

While the region's countries have made huge strides in reducing poverty and the prospects are good for meeting the first MDG of halving extreme poverty (those living on less than US$1 a day), the so-called "working poverty" remains a serious problem, according to the report. Some 355 million workers in the region receive inadequate incomes from their labour, which leaves them and their families below the US$1 a day poverty line.

"It isn't just the lack of jobs available that should concern us, the quality of jobs and of opportunities is just as important," said Mr. Shinichi Hasegawa, Regional Director, ILO Regional Office for Asia and the Pacific. "Jobs which do not allow people to earn enough to keep themselves and their families, or work that is unsafe or unhealthy, are no solution to poverty. This report shows that the problems spotlighted by the MDGs are all interlinked - poverty can't be tackled unless issues as diverse as child labour, gender equality and youth employability are addressed."

Note 1: Labour and Social Trends in Asia and the Pacific 2005, International Labour Office, Bangkok, 2005.