ILO says job losses are increasing due to economic crisis

In presenting the new data, ILO Director-General Juan Somavia, said the ILO’s annual International Labour Conference, to be held in Geneva on 3-19 June, was to consider an emergency “global jobs pact” designed to promote a coordinated policy response to the global jobs crisis.

“We are seeing an unprecedented increase in unemployment and the number of workers at risk of falling into poverty around the world this year”, Mr. Somavia said. “This is cause for grave concern. To avoid a global social recession we need a global jobs pact to address this crisis, and mitigate its effects on people. The choice is ours and the time to act is now.”

In the Global Employment Trends Update, May 2009 the ILO revised upwards its unemployment projections to levels ranging from 210 million to 239 million unemployed worldwide in 2009, corresponding to global unemployment rates of 6.5 and 7.4 per cent respectively.

The Trends report projects an increase of between 39 and 59 million unemployed people since 2007 (Note 1) as the most likely range. Actual outcomes will depend on the effectiveness of fiscal expenditures decided by governments and on a functioning financial sector. In this regard, Mr. Somavia recalled the important decisions taken by the G20 Leaders at their London Summit.

Updated projections of working poverty across the world indicate that 200 million workers are at risk of joining the ranks of people living on less than USD 2 per day between 2007 and 2009.

The crisis is hitting youth hard. The number of unemployed youth is expected to increase by between 11 and 17 million from 2008 to 2009. The youth unemployment rate is projected to increase from around 12 per cent in 2008 to a range of 14 to 15 per cent in 2009.

Mr. Somavia cautioned that past experience suggested a considerable lag of 4 to 5 years on average in the recovery in labour markets after economic recovery. There was a risk of the global jobs crisis “persisting” for the next several years.

“This is why the International Labour Conference is considering a global jobs pact aimed at placing employment creation and social protection at the centre of recovery policies,” Mr. Somavia said. “The aim of the pact is to make sure that both the extraordinary stimulus measures together with other government policies better address the needs of people who need protection and work in order to accelerate combined economic and employment recovery.”

The ILO report said 2009 will represent the worst global performance on record in terms of employment creation. The report underlined that the global labour force is expanding at an average rate of 1.6 per cent, equivalent to around 45 million new entrants annually, while global employment growth decreased to 1.4 per cent in 2008 and is expected to drop further to between 0 and 1 per cent in 2009.

The ILO also said that in the 2009-2015 period, around 300 million new jobs will have to be created just to absorb the growth in the labour force (Note 2).

Regional key findings

* In the Developed Economies & European Union, total employment is projected to shrink this year by between 1.3 per cent and 2.7 per cent. The region is likely to account for 35 to 40 per cent of the total global increase in unemployment, despite accounting for less than 16 per cent of the global labour force.

* In Central and South Eastern Europe (non-EU) & CIS the number of unemployed could increase by as much as 35 per cent in 2009. Total employment is projected to shrink by between 1 and 2.8 per cent.

* In East Asia, it is estimated that 267 million people, representing more than one third of the total employed, were living on less than 2 dollars per day at the onset of the crisis. There were around 12 times as many people in vulnerable employment as in unemployment.

* In South East Asia and the Pacific a fairly moderate increase in unemployment is projected for this region, though workers and firms in export-oriented industries are being hit hard.

* In South Asia, approximately 5 per cent of the labour force is unemployed but nearly 15 times as many workers are employed, but in vulnerable employment. The number of workers living on less than USD 2 per day is projected to grow by up to 58 million between 2007 and 2009.

* In Latin America, the unemployment rate is projected to rise from 7.1 per cent in 2007 to between 8.4 and 9.2 per cent in 2009.

* The ILO projects an increase in unemployment of up to 25 per cent in the Middle East and up to 13 per cent in North Africa in 2009 compared to 2007. Vulnerable employment is also expected to increase in both regions. Around one in three workers in each region are in vulnerable employment and this ratio could rise to as much as 4 in 10.

* In sub-Saharan Africa, an estimated 73 per cent of the region’s workers are in vulnerable employment, and this could rise to more than 77 per cent this year. The crisis poses a serious threat to investment in infrastructure and capital goods that are crucial for the region’s continued development. The potential harm of global trade protectionism in response to the crisis should not be understated.

The Global jobs pact: Recovery through Decent Work Policies

In a separate report to be discussed at the International Labour Conference, Mr. Somavia said that “unless additional swift and bold action is taken, employment will remain depressed well after stock markets recover, the world economy resumes positive growth, and media attention shifts to other issues. There is a real danger that, once some growth returns, victory will be declared prematurely, turning a blind eye to the lingering jobs crisis.”

Underlining the risks carried by prolonged employment crises, Mr. Somavia added that if left unchecked, “the global jobs and social protection crisis affecting working families and local communities will become a much larger political crisis. The simmering ferment of a social recession is there. These tensions add to the existing anxieties caused by persistently high food prices, wide income gaps between rich and poor and weakened middle classes.”

“A global jobs pact would stimulate the real economy and sustain working families through employment-oriented measures. It would reduce the time to recovery. It would activate the recovery of employment as quickly as possible together with the resumption of economic growth”, Mr. Somavia said.

Note 1 - In previous estimates the ILO projected that global unemployment was likely to increase by between 24 million (unemployment rate of 6.3 per cent) to 52 million people (7.1 per cent) worldwide from 2007 to 2009.

Note 2 - Economically Active Population Estimates and Projections 1980-2020 (EAPEP), at http://laborsta.ilo.org/.


- Related information

Document: * Global Employment Trends, May 2009 Update - [pdf 2986 KB]

Meeting document: * Tackling the global jobs crisis Recovery through decent work policies - Report of the Director-General - [pdf 331 KB]