2014 Global Employment Trends
Economic recovery producing profits, not jobs
A weak global recovery has failed to create jobs, but is yielding considerable profits for many businesses, a new report says.
The weak global economic recovery has failed to create jobs and has increased global unemployment, but is yielding considerable profits for many businesses, according to a new report released by the ILO.
In 2013, the global unemployment figure stood at nearly 202 million, the report says, which is due at least in part to a lack of aggregate demand brought about by reductions in public spending and losses in household income.
On 24 January, ILO and other UN experts gathered in New York to present and discuss the findings of the new report, Global Employment Trends 2014: Risk of a jobless recovery, which details the latest global and regional projections on labour markets around the world.
Citing the report, Stephen Pursey, the ILO’s Director of Multilateral Cooperation, said the main challenges faced by global labour markets are the outsize number of jobseekers, particularly among youth, as well as the growing gap between skills contained in education and training curricula and those demanded in the labour market.
Mr. Pursey spoke of the increase in informality in many sectors and the slowdown in creating new decent jobs. Where businesses are turning profits, the report says, they are being diverted to financial markets and used to pay higher dividends, rather than invested in the real economy to create decent jobs.
The Special Advisor at the UN Development Programme (UNDP), Olav Kjørven, suggested that the fallout from the jobs crisis would have negative long-term economic consequences, which could ultimately threaten political stability and security. Mr. Kjørven said that deepening inequalities, due in part to the benefits of growth not being fairly shared, had historically led to political upheavals. “It is time for the international community to get serious about a transformative jobs agenda in the post-2015 development discussions,” said Mr. Kjørven.
In her analysis, Ronnie Goldberg, Senior Counsel of the US Council for International Business (USCIB), said that businesses were concerned about the size of the informal economy which in many countries was in effect “the economy.” To help businesses flourish and create jobs, Ms. Goldberg said that essential policies needed to be put in place, namely the rule of law and a conducive regulatory environment, anti-corruption measures, respect for fundamental rights at work, the protection of intellectual property and flexible labour markets.
Ms. Goldberg concluded by saying that although policies needed to respond to each country’s particular situation, overall there needs to be a greater focus on getting women and youth into jobs, as well as ensuring that they have the skills employers require.
The International Trade Union Confederation (ITUC), represented by Peter Bakvis, said the current economic organization had favoured profits at the expense of preserving or raising household incomes, which had reduced aggregate demand and slowed jobs growth. Instead, Bakvis pointed to the report’s recommendation, which focused on improving labour incomes to address the aggregate demand deficit, including an increase for minimum wages and strengthening of collective bargaining arrangements.
Mr. Bakvis stated that “stimulus programmes ended too soon and austerity programmes wiped away gains of most workers and their families. Monetary policies did help the financial system from bottoming out, however, it largely went into financial markets to support share buy-backs and higher dividend payments but did nothing for the real economy and long-term economic growth.”
In highlighting the policy recommendations of the report, Mr. Pursey stated that policy makers needed to focus on three key areas: improving overall growth through continued stimulus measures; resolving uncertainty by better coordinating monetary and fiscal policies, and addressing structural labour market issues with active labour market policies, such as public employment services and training programmes.
“Currently implemented fiscal consolidation packages are failing to achieve higher growth and will cost another 2.4 million jobs by 2020. However, there is another and more promising way forward. From our analysis, a coordinated stimulus package with employment-friendly policies in G20 countries, for example, could increase GDP growth to 2.1 per cent per annum, decrease unemployment rates to 6.4 per cent, which would add 6.1 million jobs,” Mr. Pursey said in summation.
As raised by many of the participants assembled for this briefing, inclusive development and decent work remain central to discussions on growth and development strategies. As Member States and the UN system continue to discuss many key issues to be reflected in the post-2015 development agenda, the findings of this report underscore the importance of employment and decent work for all.
In 2013, the global unemployment figure stood at nearly 202 million, the report says, which is due at least in part to a lack of aggregate demand brought about by reductions in public spending and losses in household income.
On 24 January, ILO and other UN experts gathered in New York to present and discuss the findings of the new report, Global Employment Trends 2014: Risk of a jobless recovery, which details the latest global and regional projections on labour markets around the world.
Citing the report, Stephen Pursey, the ILO’s Director of Multilateral Cooperation, said the main challenges faced by global labour markets are the outsize number of jobseekers, particularly among youth, as well as the growing gap between skills contained in education and training curricula and those demanded in the labour market.
Mr. Pursey spoke of the increase in informality in many sectors and the slowdown in creating new decent jobs. Where businesses are turning profits, the report says, they are being diverted to financial markets and used to pay higher dividends, rather than invested in the real economy to create decent jobs.
The Special Advisor at the UN Development Programme (UNDP), Olav Kjørven, suggested that the fallout from the jobs crisis would have negative long-term economic consequences, which could ultimately threaten political stability and security. Mr. Kjørven said that deepening inequalities, due in part to the benefits of growth not being fairly shared, had historically led to political upheavals. “It is time for the international community to get serious about a transformative jobs agenda in the post-2015 development discussions,” said Mr. Kjørven.
In her analysis, Ronnie Goldberg, Senior Counsel of the US Council for International Business (USCIB), said that businesses were concerned about the size of the informal economy which in many countries was in effect “the economy.” To help businesses flourish and create jobs, Ms. Goldberg said that essential policies needed to be put in place, namely the rule of law and a conducive regulatory environment, anti-corruption measures, respect for fundamental rights at work, the protection of intellectual property and flexible labour markets.
Ms. Goldberg concluded by saying that although policies needed to respond to each country’s particular situation, overall there needs to be a greater focus on getting women and youth into jobs, as well as ensuring that they have the skills employers require.
The International Trade Union Confederation (ITUC), represented by Peter Bakvis, said the current economic organization had favoured profits at the expense of preserving or raising household incomes, which had reduced aggregate demand and slowed jobs growth. Instead, Bakvis pointed to the report’s recommendation, which focused on improving labour incomes to address the aggregate demand deficit, including an increase for minimum wages and strengthening of collective bargaining arrangements.
Mr. Bakvis stated that “stimulus programmes ended too soon and austerity programmes wiped away gains of most workers and their families. Monetary policies did help the financial system from bottoming out, however, it largely went into financial markets to support share buy-backs and higher dividend payments but did nothing for the real economy and long-term economic growth.”
In highlighting the policy recommendations of the report, Mr. Pursey stated that policy makers needed to focus on three key areas: improving overall growth through continued stimulus measures; resolving uncertainty by better coordinating monetary and fiscal policies, and addressing structural labour market issues with active labour market policies, such as public employment services and training programmes.
“Currently implemented fiscal consolidation packages are failing to achieve higher growth and will cost another 2.4 million jobs by 2020. However, there is another and more promising way forward. From our analysis, a coordinated stimulus package with employment-friendly policies in G20 countries, for example, could increase GDP growth to 2.1 per cent per annum, decrease unemployment rates to 6.4 per cent, which would add 6.1 million jobs,” Mr. Pursey said in summation.
As raised by many of the participants assembled for this briefing, inclusive development and decent work remain central to discussions on growth and development strategies. As Member States and the UN system continue to discuss many key issues to be reflected in the post-2015 development agenda, the findings of this report underscore the importance of employment and decent work for all.