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ILO on global employment trends

26 July 2016 12:00 am - 0     - {{hitsCtrl.values.hits}}

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Developed economies have better job creation and employment conditions who are responsible for almost one quarter of global unemployment

 

As per the International Labor Organization (ILO) study on employment trends of the globe, the world economy is estimated have grown by 3.1 percent in 2015 showing a weaker outlook than projectedyear before. The growth projections made for the next two years would be around 3 percentcausing challenges to the world of enterprises and workers. 
Slowdown in Chinese economy together with decline of commodity prices on energy side, pushing commodity exporters such as Braziland Russia in to stagnation.

 


Global unemployment 
Slowing of the economy pushed the  unemploymentin the globe reaching  197 million by 2015 and it was 196 million in 2014. This is an increase of 27 million from the pre crisis levels. The most affected are from Latin America, some of the Asian countries inclusive of Chinaand oil exporting countries from the Arab region. 


In most of the developed economies the job growth was better than anticipated, mainly in US, Central and Northern Europe. In fact it is not worthy that over 46 percent of the total employment amounting to 1.5 billion jobs are vulnerable due to poor job quality and limitations in having proper social protection schemes. Over 70 percent workers are in vulnerable situation in Southern Asia and sub Saharan Africa as per the report.


Developed economies had better job creation and employment conditions who are responsible for almost one quarter of global unemployment. Northern, Southern and western EU countries including Germany and Italy had better and positive situations. The developing and emerging economies will add 4.8 million to the global unemploymentwithin next two years. The global unemployment rate may un-change and be remained at 5.8 percent in 2016 as per the ILO report. 

 


Working poverty 
Due to global economic slowdown in 2015, the global unemployment in 2016 will be increased by approximately 2.3 million and will go up further by another 1.1 million in 2017, mostly in developing and emerging economies. There is a possibility that in emerging economies limited growth in middle class and possibly leading to social unrest situations. ILO report says nearly 327 million employed people are in extreme poverty, earning less than US$ 1.9 per day whilst 967 million are in moderate or near poverty, earning US$ 1.9 to  5. These low income groups are visible in sub Saharan countries, Malawi, Mozambique, Tanzania, some of the Latin Amarican and Asian countries including Cambodia and Nepal. 


Lack of productive job opportunities and social protection system in emerging and developing economies, are creating low paid jobs which leads to higher working poverty. Most of the countries have failed in providing sufficient number of formal jobs for the workforce where such rates exceed 50 percent, in other words more than 50 percent workers in more than half of the countries  are in informal jobs with low productivity and low salaries.


Out of global employment almost 46 percent are in vulnerable situation amounting to more than 1.5 billion having limited access to social protection systems. There is a considerable gap in inclusiveness of employment.  Vulnerable job situation is higher in Asia, Africa and Latin American regions. 

 


The global slowdown
The slowdown in China and their corrective policies are considered to be  major factors affecting the global economic slowdown. The predictions made by IMF confirm that the drop of GDP growth in China negatively affects the entire Asia. The fact that China being the second largest export destination for Europe, is also creating an adverse situation for those economies. The average annual trade growth figures declined considerably from 2012 onwards. 


The drop of commodity prices in the globe brought in difficulties for the commodity exporters such as Australia, Canada, Arab countries, Brazil, Chile, Indonesia, Russia, Bolivia and Venezuela. The big time commodity importers like EU, India, Thailand, Turkey and US were not able to get the benefit of the low commodity prices and to offset the global slowdown. 


The decline in long-term capital investment and slowdown in working age population growth in emerging countries, rapidly ageing population in advanced economies are affecting the labor supply growth which in turn affects economic growth as well.

 


Uneven distribution of gains from growth
It is imperative to mention that growth advantages are not evenly distributed among the population. Incomes of richest one percent of the population have grown much faster where they own fifty percent of the global wealth making a 44 percent increase from 2009. This situation negatively affects the capital investments. 

 


Gender gaps in labor market and women empowerment
Gender equality and women empowerment plays a key role in 2030 agenda for sustainable development. The report says positive signs are visible in number of women in decent employment and taking further steps to narrow these gaps are considered vital.  


Many women continue to work as family workers and informal workers with limited access to social protection mechanisms. In other terms more women are engaged in part time and temporary contracts. The ILO report adds on to say that women continue to suffer from occupational segregation, discrimination and hourly work.  Significantly,  in developed countries women are more engaged in less remunerated opportunities such as social, health and education sectors. In developing economies women are more engaged in low paid labor intensive agro sector. Country specific policies to address the said situation is extremely important with a special focus on making part time job opportunities at their choice, women focused training and skills development, affordable and quality childcare&maternity care and protection against violence.  


In this aspect the governments can address the issue through fiscal measures allocating and required funds and ensuring policy changes. 

 


Forced labor, human trafficking and child labor
The Sustainable Development Agenda is highlighting the necessity of addressing all these issues and to whip off the child labor in any form by 2025.  The ILO says there are 21 million who are victims of forced labor which they cannot leave their jobs due to various situations. Emerging and developing nations in Asia and Pacific, African region and Latin America are most contributing respectively for this situation.


ILO report says that, over 168 million belong to age limit of 5 to 17 who are engaged in child labor in our world. As far as gender situation is concerned 50.7 percent are boys and girls are slightly lower to be 49.3 percent. 

 


Trends in different regions Africa
Northern Africa is having many conflicts but expected record slow and steady growth in next few years to come. GDP growth in 2015reached 3.7 percent, experiencing a 2 percent growth in 2011.  Many countries in the region facing a drop of tourism business due to prevailing threats on security. Child labor remains high in northern Africaamounting to almost 9.2 million and within the age group of 5 to 17 years.  Sub Saharan countries are also facing a slowdown triggered by low commodity prices with changes taking place in China.


Policy interventions in youth empowerment and job creations would be much needed to address the situation.

 


Americas - Northern America
Labor market situation was continuing to improve in USA  backed by continues economic growth bearing the benefits of lower oil prices, increased consumer spending, improving financial conditions. Canada had a slowdown on the economy caused by lower oil and commodity prices being the facts 9 percent of the businesses are in oil and gas industry and non energy commodity based businesses are 8 percent of the economy. Eventually, Canada could not create enough job opportunities to accept new entrants to the market.  

 


Latin America and Caribbean 
As per the ILO report, Brazil the largest economy in the region entering the recession had a spillover effect on the entire region slowing down to 0.3 percent growth. Low prices of all the export items including food and beverages, petroleum, metals caused the damage.  Though the labor market conditions have lost the momentum, the optimistic side of the story is that USA economy is picking up and positive developments could be expected through spillover. 

 


Arab states
Decline in oil prices and geopolitical tensions have seriously affected the gulf region causing difficulties to Saudi Arabia, Bahrain and many others. Most of the countries who had budget surplus is now experiencing deficits reflecting badly on employments aspects.   Arab states experience large amount of migrant workers outflowing from Iraq, Siriya, Libya, Yemen, some of the western&eastern Asian countries. These workers are employed as temporary low paid workers working in very poor working conditions. 


Recent estimates indicates that more than 60% refugees of the globe are from Arab region causing difficulties to surrounding countries. 

 


Asia and the Pacific
As discussed at above in the article, slowdown of the Chines economy is having a negative impact on the region purely because  40 percent of the total output of the region is  from China and it has a spillover effect on other close by countries.   


The region having more than half of the world’s population and contributing to the world GDP at highest level is bearing challenges to overcome specifically: Poverty reduction, youth development, gender equality and women empowerment, proving better environment for migrant workers and managing natural disasters and climate change
ILO is calling for a shift on economic and employment policies in the globe in order to eradicate issues faced by various economies. It is significant to reinforce labor market institutions and guarantee a better social protection system and avoid increase of unemployment and underemployment and working poverty.   


Reference: World Employment and Social Outlook 2016, IMF data 
(The writer is the Secretary General and CEO of The National Chamber of Commerce of Sri Lanka)

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