Director-General Juan Somavia said, “The ILO message is realistic, not alarmist. We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession. Progress in poverty reduction is unravelling and middle classes worldwide are weakening. The political and security implications are daunting.”
Mr. Somavia said the crisis underscored “the relevance of the ILO Decent Work Agenda. We find many elements of this Agenda in current measures to promote job creation, deepening and expanding social protection and more use of social dialogue.”
The new report updates a preliminary estimate released last October indicating that the global financial crisis could increase unemployment by between 15 to 20 million people by 2009. Its key conclusions are as follows:
- Based on November 2008 IMF forecasts, the global unemployment rate would rise to 6.1 per cent in 2009 compared to 5.7 per cent in 2007, resulting in an increase of the number of unemployed by 18 million people in 2009 in comparison with 2007.
- If the economic outlook deteriorates beyond what was envisaged in November 2008, which is likely, the global unemployment rate could rise to 6.5 per cent, corresponding to an increase of the global number of unemployed by 30 million people in comparison with 2007.
- In a current worst-case scenario, the global unemployment rate could rise to 7.1 per cent and result in an increase in the global number of unemployed of more than 50 million people.
- The number of working poor – people who are unable to earn enough to lift themselves and their families above the US$2 per person, per day, poverty line, may rise up to 1.4 billion, or 45 per cent of all the world’s employed.
- In 2009, the proportion of people in vulnerable employment – either contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship – could rise considerably in the worst-case scenario to reach a level of 53 per cent of the employed population.
The ILO report notes that in 2008, North Africa and the Middle East still had the highest unemployment rates at 10.3 and 9.4 per cent respectively, followed by Central & South Eastern Europe (non EU) and the Commonwealth of Independent States (CIS) at 8.8 per cent, sub-Saharan Africa at 7.9 per cent and Latin America at 7.3 per cent.
The lowest unemployment rate was once again observed in East Asia at 3.8 per cent, followed by South Asia and South-East Asia & the Pacific where respectively 5.4 and 5.7 per cent of the labour force was unemployed in 2008.
The report shows that the three Asian regions – South Asia, South-East Asia & the Pacific and East Asia – accounted for 57 per cent of global employment creation in 2008. In the Developed Economies & European Union region, on the other hand, net employment creation in 2008 was negative, minus 900,000, which explains in part the low global employment creation in this year.
Compared with 2007, the largest increase in a regional unemployment rate was observed in the Developed Economies & European Union region, from 5.7 to 6.4 per cent. The number of unemployed in the region jumped by 3.5 million in one year, reaching 32.3 million in 2008.
According to the study, sub-Saharan Africa and South Asia stand out as regions with extremely harsh labour market conditions and with the highest shares of working poor of all regions. Although the trend has been declining over the past ten years, around four-fifths of the employed were still classified as working poor in these regions in 2007.
Policy measures
The economic crisis of 2008 has deepened the concern over the social impacts of globalization which the ILO had previously raised. Stressing the need to take measures to support vulnerable groups in the labour market, such as youth and women, the ILO report observes that a huge labour potential remains untapped worldwide. Economic growth and development could be much higher if people are given the chance of a decent job through productive investment and active labour market policies.
“The Decent Work Agenda is an appropriate policy framework to confront the crisis. There is a powerful message that tripartite dialogue with employers and workers organizations should play a central role in addressing the economic crisis, and in developing policy responses,” Mr. Somavia said.
The report lists a number of ILO-recommended policy measures being applied by many governments, as discussed by the ILO Governing Body in November 2008, namely:
- wider coverage of unemployment benefits and insurance schemes, re-skilling redundant workers and protecting pensions from devastating declines in financial markets;
- public investment in infrastructure and housing, community infrastructure and green jobs, including through emergency public works;
- support to small and medium enterprises
- social dialogue at enterprise, sectoral and national levels.
If a large number of countries, using their own accumulated reserves, emergency IMF loans and stronger aid mechanisms, put in place coordinated policies in line with the ILO Decent Work Agenda, then the effects of the downturn on enterprises, workers and their families could be cushioned and the recovery better prepared.
Women’s day event focuses on impact of financial crisis on work and family
The ILO marked International Women’s Day 2009 with a panel discussion on the impact of the financial crisis on the sharing of work and household responsibilities between women and men. The tripartite panel discussion on the theme Work and family: The way to care is to share! also examined good practices by countries and workers’ and employers’ organizations in addressing the equal sharing of responsibilities between women and men. Work and family was also the March theme of the Gender Equality at the Heart of Decent Work Campaign launched in June 2008 to increase general awareness and understanding of gender equality issues in the world of work.
Speakers included Ms Bibata Niandou Barry (Minister of Women’s Promotion and Child Protection – and recipient of the MDG3 Torch, Niger); Mr. David Loughman (Managing Director of A/S Norske Shell, Norway); and Ms Francisca Jiménez (Vice-chair of the Women’s Committee of the Trade Union Confederation of the Americas (TUCA), Dominican Republic).