By Julia Kollewe
October 1, 2010The Guardian
The International Labour Organisation (ILO) has warned of growing social unrest because it fears global employment will not now recover until 2015. This is two years later than its earlier estimate that the labour market would rebound to pre-crisis levels by 2013. About 22 million new jobs are needed - 14 million in rich countries and 8 million in developing nations.
The United Nations work agency today warned of a long "labour market recession" and noted that social unrest related to the crisis had already been reported in at least 25 countries, including some recovering emerging economies.
Crisis-hit Spain faced its first general strike in eight years this week as unions protested against the government's austerity measures and labour reforms. The strike on Wednesday coincided with protests in Greece, Portugal, Ireland, Slovenia and Lithuania, as well as demonstrations in Brussels by tens of thousands of workers from across Europe as part of a European day of action against public spending cuts.
"Fairness must be the compass guiding us out of the crisis," said ILO director general Juan Somavia. "People can understand and accept difficult choices, if they perceive that all share in the burden of pain. Governments should not have to choose between the demands of financial markets and the needs of their citizens. Financial and social stability must come together. Otherwise, not only the global economy but also social cohesion will be at risk."
Withdrawing fiscal stimulus too early
Raymond Torres, lead author of the ILO's annual World of Work report, published today, warned governments against withdrawing fiscal stimulus measures while the economic recovery was still weak.
Torres said there were two main reasons for the bleaker outlook facing many countries: "The first is that fiscal stimulus measures that were critical in averting a deeper crisis and helped jump-start the economy are now being withdrawn in countries where recovery, if any, is still too weak," he said. "The second, and more fundamental factor is that the root causes of the crisis have not been properly tackled."
The ILO said the global economy had started growing again, with encouraging signs of employment recovery, especially in some emerging economies in Asia and Latin America. But it added: "Despite these significant gains ... new clouds have emerged on the employment horizon and the prospects have worsened significantly in many countries."
Since the crisis started in 2007, some 30-35 million jobs have been lost worldwide. The ILO forecasts that global unemployment will hit 213 million this year, a rate of 6.5%. For the United States, the number of jobs still needed to regain pre-crisis levels is 6.9 million.
Many countries that experienced employment growth at the end of 2009 are now seeing the jobs recovery weaken. Even among people with jobs, satisfaction at work has deteriorated significantly.
"The longer the labour market recession, the greater the difficulties for jobseekers to obtain new employment," the ILO report said. "In the 35 countries for which data exists, nearly 40% of jobseekers have been without work for more than one year and therefore run significant risks of demoralisation, loss of self-esteem and mental health problems. Importantly, young people are disproportionately hit by unemployment."
The ILO recommends three policies for a jobs-led recovery:
• Active labour market policies including work-sharing that target vulnerable groups such as young people, and training.
• A closer link between wages and productivity gains in surplus countries to boost demand and job creation.
• Financial sector reform to ensure savings are channelled to productive investment and the creation of more stable jobs.
