ILO: Countries investing in high quality jobs can make economic leaps

ADDIS ABABA – Countries that invested the most in quality jobs from the early 2000s grew nearly one percentage point faster every year since 2007 than other developing and emerging economies, says a new ILO report.

The World of Work 2014: Developing with Jobs report, which provides an in-depth analysis for 140 developing and emerging nations shows for the first time that investing in quality jobs, reducing vulnerable employment and tackling working poverty leads to higher economic growth.

In South Asia and sub-Saharan Africa, more than three out of four workers are in vulnerable forms of employment, with women disproportionately affected compared to men.

Moreover, in sub-Saharan Africa, a large share of both women and men in the region remain poor and have no choice but to take up any form of work available.

The highest unemployment rates, in North Africa and the Middle East, are expected to remain at 12.3 and 11.1 per cent in 2014.

In South Asia and sub-Saharan Africa, while extreme poverty is projected to continue to decline, many of the new jobs created over the next several years are unlikely to be sufficiently productive to allow workers to escape poverty or near poverty. In both regions, the “near poor” segment of the workforce is projected to see the most growth between 2014 and 2018 and both regions are also expected to see a continued increase in the number of workers in moderate poverty.

Countries as cases in point

The report cites Senegal as one country where growth increased as a result of focusing on quality jobs. The country increased its share of wage and salaried workers from around 12 per cent in 1991 to 26 per cent in 2013. The share of the working poor decreased by 34 percentage points over the same period, while productivity increased by an average of 0.5 per cent per year.

Looking ahead as far as the year 2100, without a substantial acceleration in productivity growth rates, average productivity levels in sub-Saharan Africa and North Africa would remain well below current levels in the developed economies. Thus, accelerating productivity growth poses a crucial challenge for many developing countries in the years ahead – while they simultaneously face the challenge of creating sufficient numbers of jobs.

Key role for social protection

The report stresses the importance of combining well designed social protection with a strategy to increase the productivity of agriculture and invest income from oil and other natural resources into the rest of the economy. It means governance measures to provide an enabling environment that can facilitate the creation and expansion of businesses.

Over the next five years, 90 per cent of jobs will be created in emerging and developing countries. This is expected to have a significant impact on migration flows. However, African countries generally have the lowest levels of minimum wages, while European countries have the highest minimum wages.

In the two regions where the world’s poorest populations are located – South Asia and Sub-Saharan Africa – around 30 per cent of the young people would like to move abroad permanently. Furthermore, for countries in these regions, the willingness to migrate does not decline significantly with age.

The ILO Director-General Guy Ryder will present his report on migration to the International Labour Conference, which starts on 28 May in Geneva. The ILO is currently chair of the Global Migration Group.

For more information please contact the ILO Communication team for Africa at [email protected] and/or the Department of Communication and Public Information at [email protected] or +4122/799-7912.