Bangkok (ILO News) – East Asia[1] is on the way to becoming a middle income region as sustained productivity growth has raised incomes and helped tens of millions of people escape poverty, according to a new report by the International Labour Organization.

However the ILO’s 2008 Global Employment Trends (GET) report cautions that despite a decade of strong economic performance, challenges remain for the countries in the region – including growing inequalities, a lack of decent work, training the young generation and environmental problems.

In 2007, 71.9 percent of all people of working age were employed – giving East Asia the world’s highest employment-to-population ratio. The ration for young people is also the highest in the world at 63 per cent, even though more young people are delaying entry to work by continuing their education longer. East Asia is also the only region where the employment-to-population ratio for young women is greater than that for young men.

In addition to high employment levels, labour productivity growth has also been impressive, and is by far the fastest of any region in the world. Since 1997 output per worker has gone from US$6,781 in 1997 to US$13,423 in 2007. The gap with the developed economies has also narrowed; in the same period labour productivity in the Developed Economies and the European Union rose from US$54,035 to US$64,231.

These sustained productivity increases appear to have made it possible for tens of millions of people to escape poverty. Ten years ago 18.8 per cent of East Asia workers were trapped in extreme poverty – earning US$1 per day or less. Today only 8.7 per cent of working people are in this income category.  The proportion of workers living with their families on less than US$2 per day has also fallen, from 59.1 per cent to 35.6 per cent – equivalent to 145 million people rising above the poverty line.

By providing 38.4 per cent of jobs, agriculture still accounts for more workers than either services (34.7 per cent) or industry (26.9 per cent). But ten years ago almost half of all workers in these countries made their living from agriculture; East Asians are moving out of agriculture faster than their counterparts in any other region of the world except South Asia .

This move away from agriculture has been matched by a move out of vulnerable employment (non formal work such as unpaid family work or own-account work).

However, the report cautions that this newly-created wealth needs to be well managed and it calls for efforts to reverse the rising levels of inequality observed in some countries. “Well developed and functioning labour markets can help to reverse inequality,” the report’s authors point out. “They insure for example that earnings follow productivity increases”.

Economic development has not been matched by significant progress in the components of decent work, such as a reduction in the region’s long average working hours, better safety and health, more rights at work, and improved social dialogue between workers, employers and governments.

Another challenge is to prepare young people for the future by investing in there skills because “low cost labour will not continue to be the region’s comparative advantage”.

Finally, the report also cautions that rapidly increasing environmental problem could soon constrain economic development in the region and will certainly have a huge impact on work and employment.

For more information and to schedule interviews please contact:

Sophy Fisher
Regional Information Officer
ILO Regional Office for Asia and the Pacific
Tel: +662 288 2482

Krisdaporn Singhaseni.
Information Officer – ILO Bangkok
Tel: +66 (0) 2288 1664

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