Global economic prospects threaten job generation
The projected economic growth for 2017 and 2018 is insufficient to jump start economic recovery that could lead to the reduction of global unemployment, a new report by the International Labour Organisation (ILO) has said.
The report titled: “Weak Outlook for Jobs at Heart of Uncertain Global Economic Prospects,” noted that the global unemployment figure is expected to reach over 200 million this year.
The report observed that progress in reducing vulnerable employment in developing countries has slowed the achievement of the 2030 Sustainable Development Goals (SDGs) forecast.
It said the demand-side and supply-side policies were needed to rekindle the positive relationship between productivity and real wage growth through increased investments, innovation, sustainable enterprise creation and decent work.
It reveals that one in eight of the global youth workforce, more than 70 million young women and men, are expected to be unemployed in 2017.
The report hinted that since the 1990s a gap between real wage growth and productivity growth had resulted in declining labour income shares in many advanced and emerging economies.
The ILO report further stressed that enhanced employment and social policy packages can make growth and development more inclusive and stronger and are key macro-economic tools, especially when cyclical and structural constraints are inhibiting full recovery of the global economy.
Despite a mild improvement compared to 2016, global economic growth is expected to remain below long-term trends in 2017 and 2018.
Against this background the ILO has projected that global unemployment will increase by 3.4 million in 2017 to reach more than 201 million. “The increase in global unemployment is concentrated in emerging economies and reflects the continuing effects of deep recessions in 2015 and 2016 in several countries but unemployment is expected to decline in advanced economies,” the report stated.
It also painted a worrisome picture of developing countries by observing that most workers there were not covered by social protection systems.
“When labour markets slacken, these workers need to join or remain in the informal economy to try to earn some income. Vulnerable employment, which measures the share of own-account workers plus contributing family workers in total employment, is a widely available measure of the scale of such informal work.
“Between 2000 and 2010 significant progress was made in reducing the proportion of workers in vulnerable employment, contributing to the parallel reduction in the incidence of extreme poverty.
“This was a period of robust growth and rising incomes in most developing countries. More recently this progress has slowed significantly or stalled altogether. The rate of vulnerable employment is expected to decline by less than 0.2 percentage points in 2017 and 2018, leaving some 1.4 billion people world-wide in chronically poor quality jobs.
“Globally, 760 million women and men are working but not able to lift themselves and their families above the $3.10 a day poverty threshold,” it said.
It highlights that South Asia and Africa, where the age profile is still young, account for three quarters of working poverty. In absolute numbers working poverty is increasing in these two regions although as a share of the working population it is slowly falling to just under half in South Asia and around 60 per cent in Africa.
The absence of enough decent work opportunities is dangerously destabilizing economic, social, environmental and political development and jeopardizing the realization of the 2030 SDGs.
It also finds that youth unemployment was a major concern in all regions because of the immediate and longer-term social and political costs. The ILO projects a further increase in youth unemployment to more than 70 million in 2017, or one in eight of the global youth workforce.