1-29-08, 9:14 am
Economic turbulence largely due to credit market turmoil and rising oil prices could spur an increase in global unemployment by an estimated 5 million persons in 2008, the International Labour Office (ILO) said Thursday in its annual Global Employment Trends report (GET).
The new projection for 2008 is in contrast to 2007, a watershed year in which sound global GDP growth – of more than 5% –, led to a “stabilization” of global labour markets with more people in work, a net increase of 45 million new jobs and only a slight increase in the number of people unemployed, to a total of 189.9 million persons worldwide.
“This year’s global jobs picture is one of contrasts and uncertainty”, said ILO Director-General Juan Somavia. “While global growth is annually producing millions of new jobs, unemployment remains unacceptably high and may go to levels not seen before this year. What’s more, though more people are in work than ever before, this doesn’t mean that these jobs are decent jobs. Too many people, if not unemployed, remain among the ranks of the working poor, the vulnerable or the discouraged.”
Significantly, the ILO report noted that the reduction in the growth in developed economies attributed to credit market turmoil and higher oil prices so far had been “compensated for in the rest of the world”, especially in Asia, where economic and job growth remained strong. However, the ILO report warned that an expected slowdown in growth during 2008 could increase the global unemployment rate to 6.1%, with a resulting absolute increase of at least 5 million unemployed worldwide.
The GET reeport also points out that the global economy growth of 5.2% created an estimated 45 million new jobs in 2007, but failed to have any significant impact on the growth of unemployment. Overall, 61.7% of the global population of working age – or an estimated 3 billion people – were employed in 2007. Although the global unemployment rate remained virtually constant at 6%, that meant an estimated 189.9 million people, compared to 187 in 2006, were unemployed worldwide in 2007. Despite growth in the economy and jobs, the worldwide deficit in decent jobs – especially for the poor – is “massive”. The ILO said five out of 10 people in the world are in vulnerable employment, either contributing family workers or own-account workers with a higher risk of being unprotected. In developing countries these two categories are most likely to work informally and hence have jobs that leave them vulnerable to poverty and risks such as low earnings, dangerous working conditions and lack of health insurance. The ILO said an estimated 487 million workers – or 16.4% of all workers – still don’t earn enough to lift themselves and their families above the US$1 per person, per day poverty line while 1.3 billion workers – 43.5% – still live below the US$2 per day threshold.
The report also underlined that the service sector continued to grow during 2007, further surpassing agriculture as the world’s most prevalent source of employment. The service sector now provides 42.7% of the world’s jobs, compared to agriculture which provides 34.9%. The industrial sector, which had seen a slight downward trend between 1997 and 2003, has continued a rather slow upward trend in recent years, representing 22.4% of global jobs. The ILO observed that the Middle East and North Africa still had the highest unemployment rates at 11.8% and 10.9% respectively in 2007, followed by Latin America & the Caribbean, Central & South Eastern Europe (non EU) & the Commonwealth of Independent States (CIS) at 8.5%. The situation in the Developed Economies & European Union (EU) seemed to be stagnating, the ILO report said, with job growth at its lowest in the last five years and unemployment up by 600,000 over 2006.
The GET reported that Latin America & the Caribbean was the only region where vulnerable employment has increased – from 31.4 to 33.2% of total employment over the last ten years, with an increase of job creation in the services sector. This finding is consistent with indications of an increase in the size of the informal economy in this region.
Mr. Somavia said “What is apparent is that economic progress doesn’t automatically translate into new and decent jobs. This shows once again that labour market policies must be at the centre of macroeconomic policies to ensure that economic growth is inclusive and that development involves good, decent work. The current economic situation is therefore cause for significant concern, and the ILO will monitor developments closely over the coming year.”
From MercoPress
