The ‘World Employment and Social Outlook‘ report by the International Labour Organisation (ILO) reveals that employment expectations in the world will deteriorate over the next five years. Global unemployment is expected to grow by 3 million people in 2015 and by another 8 million over the next four years.
Young people, in particular young women, are still unemployed in “disproportionate” numbers. In 2012, almost 74 million people (aged 15 to 24) were looking for a job. Youth unemployment rates almost triples those of adults. The increase in youth unemployment is common to all regions and prevails in spite of improvements in education; a situation that encourages social unrest.
The International Labour Organisation says that there is a great gap between Spain and Greece, with unemployment rates in the range of 25% and above 52% in the case of youth unemployment, and Austria or Germany, with a general rate of 5% and a youth unemployment rate of 8%.
This international organisation states that countries with high youth unemployment rates are “especially vulnerable” to a surge in social unrest, which has increased during the crisis due to unemployment but also due to greater inequalities and a fall in income. According to this organisation, inequalities in some advanced economies have increased quickly and are starting to resemble those in emerging countries. Among the reasons given: the fall in the number of routine jobs that require medium qualifications while the demand for workers at the upper and lower ends of the qualification table increases. Today, workers with a certain level of training find they have to compete for low-skilled jobs.
The ILO report notes that real wages in Spain have fallen in almost every sector since 2011 and have only increased in extractive and power-related industries and marginally in the art and entertainment sector. This contraction has been particularly significant in the public sector, with real wage reductions of 4.2% in health, 2.7% in education and 2.3% in administrative jobs. There has also been a 1.5% fall on average between 2011 and 2013 in trade, professional and scientific activities and in transport and storage.
The report also indicates that internal wage contraction has helped reduce some of the cost competitive differentials within the euro area but this has “not always translated into improved external competitiveness (trade) and internal reallocation towards more productive sectors”.
“Companies are not investing because the domestic demand is not looking good and this will only improve if wages increase. The next step now is an improvement in wages” notes the director of the ILO Office in Spain, Joaquín Nieto.