Earlier this month, the International Labour Organization, the Organisation for Economic Co-operation and Development, and the World Bank Group issued a 30-page document explaining the situation, as they and a wide range of statistics saw it, of the jobs situation in the world’s 20 largest economies, or G-20. These countries come from six continents: 7 in Europe, 3 in North America, 6 from Asia, and 2 in South America, along with South Africa and Australia. Their level of prosperity runs from as low as India and Indonesia to Japan, Germany, the United Kingdom, and of course the United States.
The report includes a great deal in both hard information and opinions, and covers the issue of what it terms the “jobs gap,” or worldwide employment shortage, quite comprehensively in the space it takes up. So what are the most noteworthy conclusions it reaches?
First, labor force participation rates seem low all over. Even though the American rate, listed at 62.8%, is about the smallest it has been since the 1970s, it is still seventh highest in the G20. In Italy, fewer than half of people aged 15 to 64 are working, and the entire European Union (its data often included in the report) is under 60%. These numbers, though, conceal wide variations in the share of women with jobs, and the rate among American men is only tied for 13th.
Second, United States unemployment among people 15 through 24, while high at 13.1%, ranks sixth best among the 20. Spain and Italy are worst here, with staggering rates, respectively, of 53.1% and 42.6%. Although Germany was third at 7.8%, the European Union overall is at a near-depression level of 22.1%.
Third, the trend of net new jobs, which had climbed steadily since at least 1999, fell way off in 2008, starting two years during which the number of positions broke about even in the “emerging” G20 countries and lost about 10 million in the “advanced” ones. Although the number of jobs in both groups has been consistently increasing since then, the trend line from 1999 through 2008, if it had continued, shows about 25 million more jobs in G20 advanced countries and 35 million more for the developing than there are. That means the Great Recession, and slower growth since then, have cost 60 million positions.
Fourth, the 30% share of unemployed United States workers being jobless for one year or more is about average among the 16 G20 countries for which that data was available. The places with the worst problem here are almost all in Europe, with 45% of unemployed people in the EU being out for a year or more. On the other hand, South Korea and Mexico, with rates around 1%, must be doing something very right.
Fifth, as I documented for the United States in Work’s New Age, productivity and wages have long since parted company in advanced G20 countries as a group as well. Since 1999, inflation-adjusted pay is up about 5%, but labor productivity, after dipping in 2008-2009, rose 17%.
Sixth, the labor share, or the percent of total domestic economic output equaling what is paid for people’s work, has been dropping in 17 of the 18 G20 countries presented. The trend of automation, a large input into changes in the labor share, seems therefore steepest in Spain, Italy, South Korea, and the United States in the advanced countries named, and in Saudi Arabia and Turkey among developing ones.
Seventh, another trend from Work’s New Age is also solidly affecting the rest of the G20 – in all twenty, the share of people aged 55 to 64 with jobs is higher than the share of those 15 to 24, which would not have been the case a generation ago.
What actions does the ILO/OECD/WB report recommend, and how good would they be? That will be the subject of the October 10th post. In the meantime, you can view the entire report at http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_305421.pdf.