BERLIN (ILO News) – Economic and social policies to promote a job-rich recovery in different countries and their effectiveness were discussed at a conference held here by the ILO and the German Friedrich Ebert Foundation.
According to an ILO report to a G20 meeting of ministers of labour issued last month, timely and internationally coordinated policy efforts adopted by G20 governments saved or created an estimated 21 million jobs in 2009 and 2010.
“The impact of the crisis has been very diverse in different countries”, said José Manuel Salazar-Xirinachs, Executive Director of the ILO Employment Sector. “The lesson is that institutions, such as good social protection system, and policies, such as timely and employment-centered fiscal stimulus packages, do make a difference”.
The crucial factors for success, according to conference participants, were the rapidity of response and the job-centered design of stimulus packages, which includes strengthened social protection, as for instance in Brazil or China, or active labour market policies and the extension of employment benefits, as in the United Kingdom, the United States and Japan.
The major thrust of the ILO’s activities, as embodied in the Global Jobs Pact passed by the International Labour Conference in June 2009, has been to reduce the time lag between economic and labour market recovery and to use the crisis as an opportunity to strengthen decent work and a fair globalization.
Among the main challenges at this point is the timing of exit strategies from fiscal stimulus packages.
“The question is how to balance the fight against the jobs crisis with the fight against the fiscal crisis”, said Raymond Torres, director of the ILO’s International Institute for Labour Studies (IILS). “The public debt situation has worsened at an unprecedented speed, but an early exit from stimulus measures would not only hit employment severely but also harm, in the medium term, fiscal consolidation due to higher social spending and reduced tax revenues“.
Other challenges identified by conference participants include the creation of a basic social floor, realizing the potential for green jobs, and improving international policy coherence to put employment and social protection at the centre of policy responses to the crisis.
Michael Sommer, President of the German Trade Union Federation and Deputy President of the International Trade Union Confederation, welcomed the inclusion of the ILO in the G-20 process and the focus that the Labour and Employment Ministers’ meeting in Washington in April put on a job-rich recovery. He called upon the ILO to work as a connecting link between the G-20 and the countries not represented at their meetings.
The conference also took an in-depth look at what some participants called the “German job miracle.” In spite of an unprecedented GDP drop by 5% in 2009, the German labour market held up surprisingly well. The unemployment rate according to ILO method stood at 7.5% in March, which is below the mark of 8% at the onset of the crisis in 2007.
One major factor in this positive development was the widespread use of short time work, i.e. a reduction in work hours, for which workers receive wage compensation from the state while employers benefit from relief from social security contributions. This instrument also worked as an economic stabilizer, as it sustained aggregate demand and tax revenues while at the same time keeping social expenditures at bay. Moreover, employers were able to immediately take advantage of the economic recovery as they had retained their skilled workers. Short-time work was described as a good example of a labour market instrument that, while generating costs in the short run, saves money in the long term by giving a boost to demand and revenues.
The German case was also lauded as a showcase for the benefits of tripartism, as the retention of workers by employers was only made possible by intensive dialogue between the government and social partners as well as mutual trust, as both employers’ and unions’ representatives confirmed.
Print
Email