28 January 2009 (ROAP/09/04)
BANGKOK (ILO News) – The global economic crisis is expected to lead to a dramatic increase in the number of people joining the ranks of the unemployed, working poor and those in vulnerable employment, the International Labour Office (ILO) says in its annual Global Employment Trends report (GET).
Based on new developments in the labour market and depending on the timeliness and effectiveness of recovery efforts, the report has developed three scenarios which illustrate that global unemployment in 2009 could increase over 2007 by a range of 18 million, 30 million workers to more than 50 million if the situation continues to deteriorate. For the Asia Pacific region as a whole, the three scenarios suggest unemployment increases of 8 million, 15 million or 27 million.
The ILO report’s third scenario also suggests that some 200 million workers, mostly in developing economies, could be pushed into extreme poverty (an income of below US$1.25 per person per day). Of these more than 140 million would be in Asia. The same scenario suggests that those in working poverty (below US$2 per person per day) could rise by 176 million, of whom 119 million would be in Asia Pacific
“The ILO message is realistic, not alarmist. We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession. Progress in poverty reduction is unravelling and middle classes worldwide are weakening. The political and security implications are daunting.” said ILO Director-General, Juan Somavia.
“The crisis is underscoring the relevance of the ILO Decent Work Agenda. We find many elements of this Agenda in current measures to promote job creation, deepening and expanding social protection and more use of social dialogue,” Mr. Somavia said. He called on the upcoming meeting of the G-20 on 2 April in London, alongside financial issues, to urgently agree on priority measures to promote productive investments, decent work and social protection objectives, and policy coordination.
Key projections of the GET report
The new report updates a preliminary estimate released last October that indicated that the global financial crisis could increase unemployment between 15 to 20 million people by 2009. Its key conclusions are as follows:
- Based on November 2008 IMF economic growth forecasts, the global unemployment rate would rise to 6.1 percent in 2009 compared to 5.7 per cent in 2007, resulting in an increase of the number of unemployed by 18 million people in 2009 in comparison with 2007.
- If the economic outlook deteriorates beyond what was envisaged in November 2008, which is likely, the global unemployment rate could rise to 6.5 per cent, corresponding to an increase of the global number of unemployed by 30 million people in comparison with 2007.
- In a current worst case scenario, the global unemployment rate could rise to 7.1 per cent (for East Asia, South-East Asia and the Pacific and South Asia the figures would be 5.5 per cent, 6.4 per cent and 6.3 per cent respectively) and result in an increase in the global number of unemployed of more than 50 million people.
- The number of working poor - people who are unable to earn enough to lift themselves and their families above the US$2 per person, per day, poverty line, may rise up to 1.4 billion, or 45 percent of all the world’s employed. For East Asia the figure would be 37 per cent, for South-East Asia and the Pacific, 55 per cent and for South Asia 85 per cent.
- In 2009, the proportion of people in vulnerable employment – either contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship – could rise considerably in the worst case scenario to reach a level of 53 percent of the employed population. For East Asia, South-East Asia and the Pacific and South Asia the figures would be 56 per cent, 64 per cent and 77 per cent, respectively.
Other findings
In 2008 North Africa and the Middle East still had the highest unemployment rates at 10.3 and 9.4 per cent respectively. The lowest unemployment rate was once again observed in East Asia at 3.8 per cent, followed by South Asia and South-East Asia & the Pacific where respectively 5.4 and 5.7 per cent of the labour force was unemployed in 2008
The three Asian regions - South Asia, South-East Asia & the Pacific and East Asia - accounted for the lion’s share - 57 per cent - of global employment creation in 2008. In the Developed Economies & European Union region, on the other hand, net employment creation in 2008 was negative, minus 900,000 which explains in part the low global employment creation in this year.
Sub-Saharan Africa and South Asia stand out as regions with extremely harsh labour market conditions and with the highest shares of working poor of all regions. Although the trend has been declining over the past ten years, around four fifths of the employed were still classified as working poor in these regions in 2007.
Policy measures
The economic crisis of 2008 has deepened the concern over the social impacts of globalization which the ILO had previously raised. Stressing the need to take measures to support vulnerable groups in the labour market, such as youth and women, the ILO report observes that a huge labour potential remains untapped worldwide. Economic growth and development could be much higher if people are given the chance of a decent job through productive investment and active labour market policies.
“The Decent Work Agenda is an appropriate policy framework to confront the crisis. There is a powerful message that tripartite dialogue with employers and workers organizations should play a central role in addressing the economic crisis, and in developing policy responses,” Mr. Somavia said.
The report lists a number of ILO recommended policy measures being applied by many governments, as discussed by the ILO Governing Body in November of 2008, namely:
i) wider coverage of unemployment benefits and insurance schemes, re-skilling redundant workers and protecting pensions from devastating declines in financial markets;
ii) public investment in infrastructure and housing, community infrastructure and green jobs, including through emergency public works;
iii) support to small and medium enterprises;
iv) social dialogue at enterprise, sectoral and national levels.
If a large number of countries, using their own accumulated reserves, emergency IMF loans and stronger aid mechanisms, put in place coordinated policies in line with the ILO Decent Work Agenda, then the effects of the downturn on enterprises, workers and their families could be cushioned and the recovery better prepared.
The ILO, in collaboration with the Asian Development Bank, is organizing a High-Level Regional Forum in Manila from 18-20 February on “Responding to the Economic Crisis - Coherent policies for Growth, Employment and Decent work in Asia and the Pacific” to promote policy dialogue between regional and international experts and policy makers from governments, business and labour on concrete steps to counter the economic and social consequences’ of the crisis.
For further information or to schedule interviews please contact:
Sophy Fisher
ILO Regional Office for Asia and the Pacific - Bangkok
Tel: +662 288 2482, Email
Krisdaporn Singhaseni
ILO Regional Office for Asia and the Pacific – Bangkok
Tel: +662 288 1664, Email
Department of Communications - ILO Headquarters, Geneva
Tel: +4122/799-7912, Email
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