It took the worst global employment crisis since the Great Depression to make the Word Bank rethink some of its core beliefs on de-regulation and growth.
The World Bank’s World Development Report 2013, released on Tuesday, underlines the scale of the jobs crisis and hints that the World Bank may finally be moving away from “trickle-down” economics to a more sophisticated and realistic policy framework.
“Jobs drive development, transform societies” reads a slogan on the WDR website. “They should not be an afterthought of growth”.
The report was released with perfect timing.
It came out while the G20 Employment Task Force was meeting in Geneva to discuss about a global standard for apprenticeships, and the day after new alarming figures on unemployment in Europe were released, with almost 18.2m people out of work and a jobless rate of 11.4 per cent in August.
Also, the WDR precedes the World Day for Decent Work, on 7 October.
What’s good
Notably, the report corrects the myth, prominent for many years in the Bank’s annual “Doing Business” publication, that the best way to create jobs is to completely de-regulate wages and working hours and promote short-term employment contracts.
The WDR admits that 2008 economic crisis increased the global employment deficit, added to the number of working poor, and that the vast majority of unemployed still receive no benefits.
Researchers agree that support for health care, education, infrastructure and the rule of law are all important ingredients for steady high-quality job creation.
On the issue of the rule of law, there seems to be a substantial and unprecedented defence of the need to support compliance with the ILO’s core labour standards.
Surprisingly, there is also an attempt to minimize the contribution that voluntary corporate social responsibility initiatives can have in assuring workers’ rights protection: “Voluntary labour initiatives cannot substitute for domestic efforts to set up adequate legal protections and put in place institutions to support compliance and provide avenues for redress” reads the report.
What’s (still) bad
However, some parts of the report still reflect deeply ingrained biases of the World Bank that impair the overall analysis.
For example, despite the emphasis of the importance of investments in education, infrastructures and an efficient judicial system in order to create quality jobs, the report refers pejoratively to “bloated” public agencies when referring to the public sector.
The report promotes a concept of “good jobs” as a substitute for the well-established ILO objective of Decent Work.
“A good job can change a person’s life, and the right jobs can transform entire societies. Governments need to move jobs to centre stage to promote prosperity and fight poverty,” commented World Bank Group President Jim Yong Kim.
However, the concept of “good jobs” is confusing and in some aspects problematic, since it includes informal economy jobs. Also, regarding the idea of “social insurance”, there is no reference to the Social Protection Floor objective which was endorsed by the UN, the G20, the IMF and other major organisations.
Even worse, there is no support for measures to prevent a recurrence of the financial sector’s self-inflicted meltdown that led to the collapse of employment, other than to mention that the “financial crisis of 2008 has reopened heated debates about the appropriate level of regulation of the financial sector”.
“Rather than parroting stereotyped comments about public service workers,” said Sharan Burrow, General Secretary of the ITUC, “the WDR would have done better to focus on the ‘bloated’ financial sector which brought the world economy to its knees in 2008 and is responsible for the global surge in unemployment that occurred.”
