Austerity plans cloud global jobs recovery: ILO

1st October 2010, Comments 0 comments

The UN labour agency said Friday that employment in many countries would only return to pre-crisis levels in 2015, two years later it previously forecast, as austerity programmes aggravate job losses.

Despite "significant gains" with renewed economic growth this year, "new clouds have emerged on the employment horizon and the prospects have worsened significantly in many countries," the agency said in its annual "World of Work Report".

"Fairness must be the compass guiding us out of the crisis," said International Labour Organisation Director General Juan Somavia, as the ILO highlighted growing social unrest over wages and working conditions.

The agency confirmed its forecast of a slight drop in the global unemployment rate in 2010 to 6.5 percent, compared to 6.6 percent last year.

It acknowledged that renewed economic growth had brought "encouraging signs" of a recovery for jobs, especially in Asia and Latin America.

However it warned that the jobs recovery in industralised economies would lag well behind emerging and developing nations, where employment was forecast to return to pre-crisis levels this year.

"In advanced economies employment is expected to return to pre-crisis levels by 2015, instead of 2013 as expected in last year's World of Work Report," the report said.

The report's lead author, Raymond Torres, blamed the deterioration in the outlook on "changes in state policies that have cast aside stimulus plans for austerity programmes".

"It's a fundamental change that wasn't expected," he told AFP.

Despite their growth, emerging and developing economies also face a challenge in creating eight million more jobs to keep up with their growing workforce, the report said.

The ILO also highlighted a worrying increase in long-term unemployment.

In 35 countries with such data, 40 percent of job seekers have been out of work for more than year, 10 percent more than in 2009.

Torres warned that such long-term joblessness could cause significant psychological harm and prompt some people to leave the labour market.

More than four million unemployed people worldwide dropped out in 2009, according to the ILO.

Even in countries like Germany, where the recovery prompted an unprecedented cut in unemployment, from 7.6 percent in August to 7.2 percent in September, a "hard core" of long term unemployed remained -- 45 percent during the first quarter, he said.

Torres said such levels of long-term unemployment heralded "a long recession in the labour market."

The ILO has already pointed to the sharp growth in youth unemployment, after an increase of 7.8 million since 2007.

Torres highlighted evidence of social tensions in 25 countries with cutbacks, claiming that the contrast with renewed bonus payments in executive pay could fuel a "time bomb".

But he pointed to Argentina, Brazil and Canada as examples of how a balanced approach could fuel economic growth, reduce excessive deficits, create jobs and improve social indicators.

The UN labour agency, International Monetary Fund and political leaders said at a conference in Oslo on September 13 that 440 million new jobs were needed by 2020 to achieve victory over the economic downturn.

© 2010 AFP

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