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ILO: Global Employment Trends 2012

According to the International Labour Organization (ILO), the world enters the year 2012 facing a serious jobs challenge and widespread decent work deficits. Global Employment Trends 2012: Preventing a deeper jobs crisis warns that “After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million.” ILO’s annual report further indicates that 600 million productive jobs must be created over the next decade in order to generate sustainable growth and maintain social cohesion.

The report suggests that more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year; yet it draws attention to an additional challenge faced by the world – creating decent jobs for the estimated 900 million workers living with their families below the US$ 2 a day poverty line, mostly in developing countries. “Despite strenuous government efforts, the jobs crisis continues unabated, with one in three workers worldwide – or an estimated 1.1 billion people – either unemployed or living in poverty,” ILO Director-General Juan Somavia said. “What is needed is that job creation in the real economy must become our number one priority.”

The report indicates that the recovery that started in 2009 has been short-lived and that there are still 27 million more unemployed workers than at the start of the crisis. The fact that economies are not generating enough employment is reflected in the employment-to-population ratio (the proportion of the working-age population in employment), which suffered the largest decline on record between 2007 (61.2%) and 2010 (60.2%).

At the same time, the report warns, there are nearly 29 million fewer people in the labour force now than would be expected based on pre-crisis trends. If these discouraged workers [1] were counted as unemployed, then global unemployment would swell from the current 197 million to 225 million, and the unemployment rate would rise from 6% to 6.9%. The report paints three scenarios for the employment situation in the future. The baseline projection shows an additional 3 million unemployed for 2012, rising to 206 million by 2016. If global growth rates fall below 2%, then unemployment would rise to 204 million in 2012. In a more benign scenario, assuming a quick resolution of the euro debt crisis, global unemployment would be around 1 million lower in 2012.

Global Employment Trends 2012 finds that youth have been particularly hard hit by the crisis with 74.8 million of them aged 15-25 unemployed, representing a 12.7% youth unemployment rate, and an increase of more than 4 million since 2007. The report indicates that, globally, young people are nearly three times as likely as adults to be unemployed, but also warns that an estimated 6.4 million young people have given up hope of finding a job and have dropped out of the labour market altogether. Furthermore, those who do find jobs are increasingly like to find themselves in part-time employment and often on temporary contracts. The report finds that “As the number and share of unemployed youth is projected to remain essentially unchanged in 2012, and as the share of young people withdrawing from the labour market altogether continues to rise, on the present course there is little hope for a substantial improvement in near-term employment prospects for young people.”

The report’s main findings also include:

• There has been a marked slowdown in the rate of progress in reducing the number of working poor. Nearly 30% of all workers in the world – more than 900 million – were living with their families below the US$2 poverty line in 2011, or about 55 million more than expected on the basis of pre-crisis trends. Of these 900 million working poor, about half were living below the US$1.25 extreme poverty line.

• The number of workers in vulnerable employment [2] globally in 2011 is estimated at 1.52 billion, an increase of 136 million since 2000 and of nearly 23 million since 2009.

• Among women, 50.5% are in vulnerable employment, a rate that exceeds the corresponding share for men (48.2%).

• Favourable economic conditions pushed job creation rates above labour force growth, thereby supporting domestic demand, in particular in larger emerging economies in Latin America and East Asia.

• The labour productivity gap between the developed and the developing world – an important indicator measuring the convergence of income levels across countries – has narrowed over the past two decades, but remains substantial: Output per worker in the Developed Economies and European Union region was US$72,900 in 2011 versus an average of US$13,600 in developing regions.

“These latest figures reflect the increasing inequality and continuous exclusion that millions of workers and their families are facing,” Mr. Somavia said. “Whether we recover or not from this crisis will depend on how effective government policies ultimately are. And policies will only be effective as long as they have a positive impact on peoples’ lives,” he stressed.

The report calls for targeted measures to support job growth in the real economy, and warns that additional public support measures alone will not be enough to foster a sustainable recovery. “Policy-makers must act decisively and in a coordinated fashion to reduce the fear and uncertainty that is hindering private investment so that the private sector can restart the main engine of global job creation,” the report urges.

Access the Executive Summary here.

Read the press release or download the full publication.