The new World of Work Report 2011: Making markets work for jobs says a stalled global economic recovery has begun to dramatically affect labour markets. On current trends, it will take at least five years to return employment in advanced economies to pre-crisis levels, one year later than projected in last year’s report.
“We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment,” said Raymond Torres, Director of the ILO International Institute for Labour Studies at the launch of the report on 31 October 2011.
The report notes that the current labour market is already within the confines of the usual six-month lag between an economic slowdown and its impact on employment. It indicates that 80 million jobs need to be created over the next two years to return to pre-crisis employment rates. However, the recent slowdown in growth suggests that the world economy is likely to create only half of the jobs needed.
The report also features a new “social unrest” index that shows levels of discontent over the lack of jobs and anger over perceptions that the burden of the crisis is not being shared fairly. It notes that in over 45 of the 118 countries examined, the risk of social unrest is rising. This is especially the case in advanced economies, notably the European Union, the Arab States and to a lesser extent Asia. By contrast, there is a stagnant or lower risk of social unrest in sub-Saharan Africa and Latin America.
The study shows that nearly two-thirds of advanced economies and half of emerging and developing markets are yet again experiencing a slowdown in employment. This comes on top of an already precarious employment situation in which global unemployment is at its highest level ever, surpassing 200 million worldwide.
The report cites three reasons why the ongoing economic slowdown may have a particularly strong impact on the employment panorama: first, compared to the start of the crisis, enterprises are now in a weaker position to retain workers; second, as pressure to adopt fiscal austerity measures mounts, governments are less inclined to maintain or adopt new job- and income-support programmes; and third, countries are left to act in isolation due to lack of international policy coordination.