G20 Labour Ministers meeting

ILO Director-General: “Persistent slow growth weakening the outlook for jobs and wages”

In a briefing to G20 Labour and Employment ministries meeting in China, Guy Ryder has raised concerns that poor prospects for economic growth risk becoming entrenched.

News | 12 July 2016
BEIJING, China (ILO News) ‒ All G20 countries face difficulties in supporting the aspirations of large sections of their working population, especially youth, the Director-General of the ILO has told a G20 Labour and Employment Ministerial meeting in Beijing.

In a briefing to Labour Ministers, Guy Ryder warned that “continuing sluggish growth, earnings inequality and labour market insecurity are weighing on global aggregate demand and could lead to a self-reinforcing circle of diminished business expectations of market growth, low investment, poor growth and insufficient recovery in the labour market.”

Ryder noted that global GDP growth has averaged 3.8 per cent annually in the period of recovery from the 2008 crisis. This was below the trend in the pre-crisis years. In 2015 growth was 3.1 per cent and no improvement is expected for 2016 and 2017.

The Director-General said there was a wide convergence on the understanding of the challenges facing global and G20 economies. He cited among them demographic trends, technological change, continuing globalization and intensifying competition, labour demand and supply mismatches, persistent poverty and increasing inequality.

Despite this awareness and subsequent policy responses, “concern about the risk of a slow growth trap is rising,” he added.

According to Ryder, the post crisis surge in number of young people who are neither in employment nor in education and training (NEETs) has, with some exceptions, yet to be turned around in the majority of G20 nations. He said that rates range from around 30 per cent or higher in Turkey, India and South Africa but some countries, such as Japan and Germany have managed to reduce rates to less than 10 per cent

Despite most emerging economies having experienced long-term declines in the incidence of informality among youth, there are signs of stagnation (Indonesia) or even reversal in this trend (Argentina, Brazil, South Africa). The scale of challenge remains significant in almost all emerging economies, ranging from just over a third of youth in South Africa to over 60 per cent in Mexico and even more in India.

He applauded the education and training and support systems many countries have provided for youth, as well as those that have aimed to improve job opportunities.

Noting that many countries have adopted new measures on promoting gender equality including the easing of family responsibilities borne by working women and encouraging female entrepreneurship, Ryder told ministers that much work remains to be done to reach the G20 target of reducing gender gaps in participation by 25 per cent by 2025.

Progress too, has been seen on the simplification and clarification of legislation and regulation of Occupational Safety and Health in many nations, commonly with a deliberate focus on improving the OSH performance of SME’s.

Ryder noted that countries were pursuing a range of policies including: measures to increase labour force participation, active labour market policies such as skills development, improved labour market efficiency and inclusivity, accelerating transformation from informal to formal employment, improving job quality, and focussing on the productivity and competitiveness of SME’s.

He highlighted that making growth more inclusive would also support recovery in the pace of growth. Measures to combat working poverty, end discrimination, narrow pay and working conditions gaps and enhance participation of under-represented groups were therefore particularly important.

The ILO Director-General further welcomed the Ministers’ focus on a balanced set of recommendations to G20 Leaders addressing both immediate concerns stemming from slow economic and employment growth with medium to long term structural challenges.

Earlier, Ryder had welcomed the commitment of Ministers to “social dialogue in the formation and implementation of good policies”. This was demonstrated in the G20 process itself through the participation of representatives of employers’ organizations and trade unions (B20 and L20) as well as some civil society groups in a half-day consultation with the Ministers.