The Decent Work Deficit: A new ILO report outlines the latest global employment trends
The ILO's 2006 Global Employment Trends Brief paints a sombre picture not only of growing unemployment and poverty but of a significant lack of decent job opportunities, especially for young people. Despite the robust world economic growth of 2005, the global economy failed to deliver enough new jobs. But the ILO's stance is a strong one, involving a global strategy of communication, education, sound policy enforcement and the promotion of entrepreneurship to encourage the creation of more and better jobs.
GENEVA - A "perfect storm" is gathering force in the global jobs landscape, due to worsening unemployment, poverty and labour migration. Despite the strong GDP growth of 4.3 per cent in 2005, which increased world output by some US$2.5 trillion, the global economy is failing to deliver enough new jobs for those entering job markets, according to the ILO's 2006 Global Employment Trends Brief ( Note 1). Some 40 million jobs must be created each year over the next decade just to keep up with the number of people looking for work.
Only 14.5 million of the world's more than 500 million extreme working poor were able to rise above the US$1 per day, per person poverty line. In addition, in 2005, of the more than 2.8 billion workers in the world, 1.4 billion still did not earn enough to lift themselves and their families above the US$2 a day poverty line - just as many as 10 years ago.
At the January 2006 World Economic Forum in Davos, Switzerland, where creating future jobs was a key item on the agenda, ILO Director-General Juan Somavia addressed the audience of world government and business leaders, saying this is an "unprecedented global jobs crisis of mammoth proportions".
In addition to an overall lack of employment opportunities, the global jobs crisis is also creating a deficit of decent work. "This crisis isn't going unnoticed on the streets of rich and poor countries alike," he said. "Increasingly, political leaders are hearing the voices of people demanding a fair chance at decent jobs and new opportunities to find and keep work. Yet, far too often those opportunities just aren't there."
The global jobs crisis is illustrated by a number of factors, which include:
- Half of the world's workers, some 1.4 billion working poor, live with their families on less than US$2 per day, per person. These people largely work in the informal sector, both in rural and urban settings.
- Unemployment is at its highest point ever and continues to rise. In the last ten years, official unemployment has grown by more than 25 per cent and now stands at nearly 192 million worldwide, or about 6 per cent of the global work force.
- Of these unemployed, the ILO estimates that nearly 86 million, or about half the global total, are young people aged 15 to 24 (see sidebar on p. 14).
- When people cannot find work at home, in their communities and societies, they look elsewhere. In the present environment, labour migration easily becomes a source of tension, not to speak of trafficking and other similar activities.
According to the Global Employment Trends Brief, the largest increase in unemployment occurred in Latin America and the Caribbean, where the number of unemployed rose by nearly 1.3 million and the unemployment rate increased by 0.3 percentage points between 2004 and 2005 to 7.7 per cent. Also the Central and Eastern Europe (non-EU) and CIS region witnessed a year-over-year increase in unemployment, which stood at 9.7 per cent, up from 9.5 per cent in 2004.
In developed economies and the European Union (EU), unemployment rates declined from 7.1 per cent in 2004 to 6.7 per cent in 2005.
Unemployment rates in Asian sub-regions did not change markedly. East Asia's unemployment rate was 3.8 per cent, thereby remaining the lowest in the world. South Asia's unemployment rate was 4.7 per cent and South-East Asia and the Pacific's was 6.1 per cent.
At 13.2 per cent in 2005, the Middle East and North Africa remained the region with the highest unemployment rate in the world. Sub-Saharan Africa's rate stood at 9.7 per cent, the second highest in the world. The region also had the highest share in working poverty, underscoring that tackling the decent work deficit is most urgently needed there.
Employment-to-population ratios, the share of people employed within the working age population, varied between regions. East Asia had the highest ratio with 71.1 per cent in 2005 but was also the region with the biggest change in its ratio over the last 10 years, with a drop of 3.5 percentage points. The Middle East and North Africa region had the lowest ratio, at 46.4 per cent in 2005.
The ILO report said the failure of most economies to turn GDP growth into job creation or wage increases, coupled with a spate of natural disasters and rising energy prices, hit the world's working poor especially hard.
In all regions, working poverty at the US$1 level declined in 2005 except in sub-Saharan Africa where it increased by another 2.5 million and the Middle East and North Africa where it stayed more or less unchanged. The total number of US$2 a day working poverty only declined in Central and Eastern Europe (non-EU) and CIS, Latin America and the Caribbean, and most considerably in East Asia. On the other hand, it increased in South-East Asia and the Pacific, South Asia, the Middle East, North Africa and especially sub-Saharan Africa.
The ILO approach
The ILO proposes five concrete steps to address the global jobs crisis. They include:
- Shifting economic and social policies to put decent work at the centre of national and international development efforts and creating a new balance between economic and social policies that stresses macroeconomic stability, adaptability and security.
- Promoting employment-rich, sustainable economic growth as a means of global as well as local economic development to create lasting, decent jobs.
- Creating the right policy and regulatory environment to encourage competitiveness and enterprise development in every country. Promoting entrepreneurship, innovation and productivity and highlighting the role of small enterprise in job creation.
- Expanding training, lifelong learning, education and other means of enhancing human capacities, with a particular focus on young people. "If we can reduce the youth unemployment rate by just half, we will add at least US$2.2 trillion to the global economy," Mr. Somavia said.
- Promoting better international governance to integrate the efforts of governments, business, trade unions and other stakeholders in civil society with the purpose of reducing poverty and creating jobs.
"If we choose to continue along the present path, the world risks becoming more fragmented, protectionist and confrontational. A continued lack of decent work opportunities, insufficient investments and under-consumption lead to an erosion of the basic social contract underlying democratic societies: that all must share in progress. It is time to revisit the commitments made by the global community to promote social inclusion and jobs as the basis of poverty reduction, and respect for fundamental principles and rights at work - this is the foundation of decent work."
Youth employment: A global goal, a national challenge
"Creating jobs for youth is not enough. Across the planet, youth are not only finding it difficult if not impossible to find jobs, but also they cannot find decent jobs," says ILO Director-General Juan Somavia. "We are facing not only an economic challenge, but a security threat of monumental proportions."
More youth are poor or underemployed than ever before. Some 106 million youth work but live in households that earn less than the equivalent of US$1 per day. And millions of young people are trapped in temporary, involuntary, part-time or casual work that offers few benefits and limited prospects for advancement. Clearly, something must be done.
Young people bring energy, talent and creativity to economies that no one can afford to squander. Around the world, young women and men are making important contributions as productive workers, entrepreneurs, consumers - as members of civil society and agents of change. What our young people do today will create the foundations for what our economies will do tomorrow.
Youth employment at a glance
- Global youth unemployment rose from 70.8 million in 1994 to 85.7 million in 2004, accounting for 45 per cent of total unemployment.
- Youth accounted for about 20 per cent of the world's estimated 535 million working poor in 2004. Some 106 million youth worked but lived in households that earned less than the equivalent of US$1 per day.
Decent and productive employment for youth is a major commitment of the Millennium Development Goals. The ILO has a special role to play in promoting policies and initiatives on youth employment as part of this commitment. The ILO's programme on youth employment operates through a global network of technical specialists at its headquarters in Geneva and in more than 60 offices around the world. It provides assistance to countries in developing coherent and coordinated interventions on youth employment.
For more information, please contact the Youth Employment Programme, at:
Note 1- Global Employment Trends Brief, January 2006, International Labour Office, Geneva.