A new report by the research arm of the International Labour Organization (ILO) says a long “labour market recession” is worsening the social outlook in many countries. The new study entitled “World of Work Report 2010 – From one crisis to the next?” acknowledges that three years into the crisis, the global economy has resumed growing, with some countries witnessing encouraging signs of employment recovery – significantly in emerging economies in Asia and Latin America. However, the report by the ILO’s International Institute for Labour Studies also warns that “despite these significant gains ... new clouds have emerged on the employment horizon and the prospects have worsened significantly in many countries”.
The ILO study says that, if current policies persist, a recovery in employment to pre-crisis levels will be delayed until 2015 in advanced economies, instead of 2013 as it projected one year ago.
At the same time, the report says, while employment in the emerging and developing countries has resumed growing, over 8 million new jobs are still needed to return to pre-crisis levels in those countries.
“The longer the labour market recession, the greater the difficulties for jobseekers to obtain new employment,” the ILO report says. “In the 35 countries for which data exists, nearly 40 per cent of jobseekers have been without work for more than one year and therefore run significant risks of demoralisation, loss of self-esteem and mental health problems. Importantly, young people are disproportionately hit by unemployment.”
“Fairness must be the compass guiding us out of the crisis,” said ILO Director-General Juan Somavia. “People can understand and accept difficult choices, if they perceive that all share in the burden of pain. Governments should not have to choose between the demands of financial markets and the needs of their citizens. Financial and social stability must come together. Otherwise, not only the global economy but also social cohesion will be at risk.” This key point was emphasised by Global March as part of the follow-up to the MDG outcome document.
Among the key findings of the new ILO study based on data from some 150 countries:
- Cases of social unrest related to the financial and economic crisis have been reported in at least 25 countries – many of them in advanced economies. In some recovering emerging economies, social unrest over the level of wages and working conditions has been registered.
- Many countries that experienced positive employment growth at the end of 2009 are now seeing a weakening of the jobs recovery. At the same time, the report says that by the end of 2009, more than four million jobseekers had stopped looking for work in the countries for which information is available.
- In more than three-quarters of 82 countries with available information, peoples' perceptions of their quality of life and standard of living declined in 2009 compared to similar data from 2006.
- Even among people with jobs, satisfaction at work has deteriorated significantly with a sense of unfairness growing in 46 of 83 countries.
- In 36 of 72 countries, people have less confidence in governments now than prior to the crisis.
The ILO study provides a three-pronged approach for getting out of the crisis that would stimulate job creation in the short run and better-quality economic growth in the future. This approach would combine, first, the strengthening of job-centred policies in order to reduce the risk of growing long-term unemployment, higher structural informality and skills’ mismatch in the event of recovery. These measures include well-designed active labour market policies, targeted measures to support vulnerable groups, notably youth, training policies that serve the needs of recovery – in countries where this takes place – and employment-oriented social protection.
The second policy element would be to promote a closer link between wages and productivity gains in surplus countries, as this would quickly boost sustainable job creation in both surplus and deficit countries. And a third would require that a true financial reform be carried out that allows savings to be channelled to more productive investment and the creation of more stable jobs.
To download a copy of the Executive Summary of the report in English, click here
In French, click here
In Spanish, click here
To download a copy of the full report, click here
Please note that the full report is only available in English at present. Please visit the web site of the International Institute for Labour Studies for more information by clicking here