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New ILO report: Despite rising unemployment, cause for cautious optimism

The 2004 Global Employment Trends report, released today by the ILO, paints a grim picture of rising global unemployment. But the annual jobs report sees signs of recovery. Here are questions and answers on the global employment picture, how this affects different people, and what solutions exist for employment generation.

Article | 11 February 2004

Question: The 2004 report says that unemployment is at record levels. Has there been a dramatic rise?

Answer: Global unemployment in 2003 was 185.9 million, an increase of about half a million on 2002 figures. This is much less than the sharp rises during 2001-2002, but the pickup in economic growth in 2003 has only had a slight impact on unemployment.

Q: Who is suffering most?

A: Young people have been affected most severely. Some 88.2 million people aged 15 to 24 faced an unemployment rate of 14.4 per cent, more than twice the overall rate which is hovering around 6.2 per cent. In addition, despite an overall decline in female joblessness from 77.9 million in 2002 to 77.8 million in 2003, women had higher rates of unemployment than their male counterparts.

Q: Globally, are there issues of concern besides unemployment?

A: In addition to rising unemployment, there is also a pressing issue of the working poor. The ILO estimates that there are still 550 million people who work, yet do not earn enough for themselves or their families to live above bare subsistence levels. This is the same level as in 2002, and the fact that there has been no improvement is cause for concern. In order to achieve the Millennium Development Goals (MDGs) of reducing poverty by half, there must be measurable signs of decline in the working poor.

Q: Economic growth in early 2003 was relatively slow, but are there specific reasons for the rise in unemployment?

A: Some phenomena may certainly have contributed to the rise. One would be the outbreak of SARS in Asia, and the other would be the war in Iraq. Both of these led to decreased travel around the world and also had a dramatic impact on tourism itself.

Q: Is stronger growth foreseen in 2004?

A: The outlook for 2004 is cautiously optimistic. The ILO expects strong output in industrialized countries. Strong demand in industrial economies and stronger domestic demand within the developing world is also expected. The growth rate in the Caribbean, Middle East and Latin America is expected to be around 4 per cent. In Asia, growth rates may reach between 5 and 7 per cent, in Africa around 4 per cent. With these levels of growth some employment creation could occur.

Q: So does economic growth mean more jobs?

A: There is a link between employment creation and output. But the report says that growth in 2004 and beyond is not enough. Policy makers should put employment policy at the forefront, linking employment policy with macroeconomic policy. Jobless growth - an increase in output without the actual creation of jobs - is a major concern of the report, and no country can expect to sustain long term growth without creating jobs. In fact if growth continues without job creation, demand for goods and services will actually decline in the long run.

Q: What policies must be adopted to help the most vulnerable, young people and the poor?

A: Youth unemployment in some places of the world is 3 times or 4 times that of overall unemployment. The underutilization of their skills and talents is wasteful and wrong. Policy makers need to develop policies that will allow youth to enter into productive society. And if poverty is to be reduced by the year 2015, specific policies are needed that are pro-poor and help individuals lift themselves out of poverty. By addressing issues of education, training and well-being, the poor will be given the tools to improve productivity.

Q: What does the future hold, and what should be done?

A: A major concern is that the growth seen in 2004 could falter or stagnate. If this occurs, there is a real chance that the MDGs of reducing poverty by half will not be achieved. Policy makers at the national level should put employment policy on an equal footing with macroeconomic policy. Decent and productive employment must be at the forefront. If output growth continues and there is decent productive employment, then there will be a real chance of achieving the MDGs.

Note 1 - Global Employment Trends, International Labour Office, Geneva 2004, ISBN 92-2-115107-7.