BEIJING, China (ILO News) – Labour market policies need to balance both support to labour incomes to lift growth and also measures to ease the mobility of workers from low productivity to higher productivity jobs, said ILO Director-General Guy Ryder in Beijing on Friday. He added that in the near term labour policies should support recovery by boosting wages, creating decent jobs and thus raising household consumption.

Guy Ryder was speaking during a “1+6” roundtable meeting on the invitation of the Chinese Prime Minister Li Keqiang, bringing together the heads of several international organizations.

“The current global situation is one where slow global economic growth has gone hand-in-hand with persistently weak labour markets,” said the ILO Director-General.

He warned that “weakness in employment, growth, falling labour income shares and stagnant real wages for the bulk of the workforce in most countries has reduced global aggregate demand.”

“This has set in motion a self-reinforcing cycle of diminished business expectations of market growth and thus low investment, further weakness in aggregate demand and hence insufficient labour market recovery.”

Ryder stressed that the medium and longer term challenges for the labour market were also worrying.

He noted, among others: eradicating extreme poverty and reducing inequality; adapting to the impacts of climate change; coming to terms with ageing in some countries while dealing with continued growth in the number of young job seekers in Africa and South Asia; as well as shaping the future of work at a time of swift technological change.

“When the G20 leaders meet in Hangzhou in 6 weeks’ time, they will certainly have such concerns on their mind,” he said.

Ryder also insisted on the need to take immediate action to strengthen aggregate demand and growth in the short term.

He noted that the political consequences of large scale employment and social adjustment in which some communities see a high risk of being left behind, while others move ahead, were increasingly evident in many parts of the world.

“Maintaining and increasing the purchasing power of wages, especially minimum wages, and of social benefits is a priority in these circumstances for economic, as well as social reasons,” he added.

Supporting China’s economic transition

Asked to comment on the Chinese economy, Ryder said the objective of the ILO was to provide information regarding the best international good practice in terms of analysis and policy experience.

The ILO Director-General drew attention to four areas where China is already moving forward and on which the ILO may be able to offer support: extending the social protection system, a sustainable wages strategy, the strong role needed for social dialogue as well as the effectiveness of training and vocational education, and further strengthening of labour market information systems.