On the eve of the World Economic Forum in Davos, the ILO has issued a special edition of its annual Global Employment Trends report which confirms the grim picture depicted so far.
Five years after the start of the financial crisis, global growth has slowed down and unemployment is on the rise again, leaving some 197 million people jobless in 2012. Unemployment has increased by a further four million during the last 12 months and another 5.1 million people are expected to lose their jobs in 2013.
The trend was confirmed also by the World Bank’s Global Economic Prospects report, released on 15 January, with growth forecasts reduced from 3 per cent to 2.4 per cent for 2013.
As for employment, young people remain most affected by the crisis, since some 73.8 million people under 24 are without a job. Although the unemployment rate had already increased to 12.6 per cent in 2012, it is expected to reach 12.9 per cent over the next four years.
The most worrying features of this crisis however relates to long-term youth unemployment, now at 35 per cent, which has no precedent in earlier cyclical downturns, and to the increasing number of young people who have become discouraged and have left the labour market.
This phenomenon is particularly evident in Western Europe, where 12.7 per cent of all young people aged between 16 and 24 are neither in employment, nor in education or training – the so-called ‘Neets’.
If the figures cannot but confirm the trends already announced in previous editions of the report, the ILO reiterates its appeal to policy makers to take additional and different steps to help the economy recover and create new, permanent jobs.
The main areas of action suggested by the UN agency for labour rights relates to various measures.
From tackling uncertainty and increase investment and job creation, particularly in developed countries, to coordinating stimulus for global demand and employment creation.
From addressing labour market mismatches, in terms of work skills and qualifications, to ensuring specific focuses and policies on long-term unemployment for young people.
In particular, the ILO calls global policy makers and international bodies such as the G20 and EU to better harmonise and coordinate policies among neighbouring countries, in order to “rebalance growth and foster multipolar growth engines.”
The agency has always been quite critical about the incongruity between monetary and fiscal policies adopted to solve debt problems, in particular in the euro area, and the indecision of policy makers.
This, the report suggests, has reinforced corporate tendencies to increase cash holdings or pay dividends, instead of investing in production and generating more jobs.
The ILO appeal couldn’t be more timely since the annual Davos meeting gives the business and financial community the chance to set out their demands on governments for the year ahead.
A report published by the World Economic Forum’s Global Agenda Council (GAC) on employment has already called for governments to provide adequate resources for cost-effective active labour market programmes, to set minimum wage floors to prevent wage deflation, as well as to invest in infrastructure and support the transition to a low carbon economy, and to facilitate access to credit for high-growth small and medium-sized businesses.
These proposals are very close to the trade union agenda. An international delegation of unionists is calling for a plan for jobs to be adopted in Davos.
“International financial institutions and governments are continuing to pursue the same old policies while the number of unemployed people keeps rising. What will it take for politicians to face up to the truth behind the numbers – their economic policies are failing?” said Sharan Burrow, general secretary of the ITUC.
