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Joint report by the ILO, the OECD and the World Bank Group

G20 faces persistent gaps in employment and job quality

The ILO, along with other international organizations - including OECD, IMF and the World Bank, have produced a number of reports on employment issues that have been prepared to inform the labour ministerial discussions. These reports help identify policy gaps where actions will have the most impact.

Press release | 09 September 2014
MELBOURNE – A large and persistent shortfall in the number and quality of the jobs being created in G20 countries is affecting prospects for re-igniting economic growth, according to a report entitled G20 labour markets: outlook, key challenges and policy responses, prepared by the ILO, the OECD and the World Bank Group for the G20 Labour and Employment Ministers meeting taking place in Melbourne on 10-11 September 2014.

Despite some recent improvement, slow recovery from the financial crisis means that many G20 economies still face a substantial jobs gap, which will persist until at least 2018 unless growth gains momentum. With more than 100 million people still unemployed in the G20 economies and 447 million 'working poor' living on less than $2 a day in emerging G20 economies, the weak labour market performance is also threatening economic recovery because it is constraining both consumption and investment.

The basic message of the report is that the labour markets of the G20 countries are still struggling, 6 years after the crisis began, both in terms of the quantity and the quality of employment. So there is really no room for complacency. More jobs with better pay contribute to household incomes, which in turn boost consumer demand. When firms see demand picking up they will invest, so creating a virtuous circle.”
Sandra Polaski, Deputy Director General for Policy, ILO


Key findings of the report include:

  • Wage growth has significantly lagged behind productivity growth in most G20 countries, while wage and income inequality either remains high or has widened.
  • Real wages have stagnated, or even fallen, for many in advanced G20 economies. 
  • In emerging G20 economies, high levels of under-employment and informality are constraining both current output and future productivity.
“Jobs are a foundation for economic recovery,” the report says. “G20 countries need more and better jobs as a foundation for sustained growth and wellbeing of their societies”.

Despite overall slower growth, a number of emerging economies have made major progress in reducing absolute poverty, and some have also reduced income inequality.

We are seeing wage and income inequality widening in many G20 countries, and if the goal is stronger, sustained, and balanced growth then inequality cannot be ignored. Equally, the situation of young people who are out of work is acute, and countries that ignore their plight do so at their own peril. We know that can spark unrest which can in turn further disrupt unemployment and growth prospects. There is no magic formula to solve this jobs crisis but we do know that it requires a ‘whole of government’ approach, involving the active collaboration of many ministries.”
Nigel Twose, Senior Director for Jobs, World Bank Group

However, informal employment remains a major obstacle to improving job quality, particularly in emerging and developing countries.

Looking ahead, the report says that achieving sustainable, equitable and inclusive growth requires policies across all relevant sectors that improve productivity and wages, employment opportunities and outcomes, particularly for those groups most affected by the crisis or who are vulnerable.

Creating more and better jobs is really the defining challenge for the G20 countries. What we have seen, especially in the advanced economies, is that real wage growth has been pretty flat and in a number of countries real wages have declined. So the challenge is to not only to create many more jobs, but also to improve the quality, the productivity and the reward people get from their work.”
Stefano Scarpetta, Director, Employment, Labour and Social Affairs, OECD

Demographic changes, such as rapid population ageing in some countries and rising youth populations in others, also mean that governments need to promote the labour market participation of women, youth and other under-represented and vulnerable groups, enhance their skills and provide job-search support.

The report also highlights social protection, social dialogue, rights at work, and workplace safety as areas in need of further action.

Quality job creation and robust, equitable growth are intertwined goals, the study concludes. “Policy interventions that address both the demand and supply sides of the labour market are essential to reverse the current self-reinforcing cycle of slow growth, low job creation and low investment. Such policies would be much more effective if taken collectively and coordinated at the G20 level.”

Other reports prepared for the G20 labour ministers' meeting:

Informality and the quality of employment in G20 countries

For many G20 countries, structural underemployment, informality and qualitative indicators of employment are more significant measures of the challenges they face in achieving inclusive growth and decent employment for all than unemployment rates alone.

Achieving stronger growth by promoting a more gender-balanced economy

G20 countries have much to gain from increased female labour force participation in terms of economic growth and increased welfare. But merely increasing labour force participation among women will not be enough to ensure that gender gaps in economic empowerment are eliminated. (Joint ILO, IMF, OECD, World Bank report)

Creating Safe and Healthy Workplaces for All

Every year, almost 1.3 million people die from a work-related disease in the G20 countries and about 221,000 suffer a fatal occupational accident. The G20 also experienced around 196 million non-fatal occupational accidents (with at least four days absence) in 2010.

For more information and to arrange interviews please contact:

  • Sophy Fisher, Senior Communications Officer –ILO
    - T: +66 (0) 8989 50912
  • Spencer Wilson, Media Relation Officer - OECD - T. +33 (1) 4524 8118
  • Camille Funnell, External and Corporate Relations - World Bank Group - T: +61 (0) 2 92356564 (office); +61 (0) 423606850 (mobile)