While the G20's agenda to accelerate GDP growth by 2% above the present trend in next five years was a positive step, the International Labour Organisation has warned that it will still leave a deficit of 45 million jobs in 2018, compared to the pre-Lehman crisis level, unless policy initiatives are adopted by major economies to boost employment.
The G20 agenda and ILO's projections assumes importance for countries such as India where economic growth has slowed sharply and constricted job creation. Major political parties, including the BJP and Congress, are canvassing for faster development so that more jobs could be created.
About 52.2% or 388 million workers in South Asia are regarded as poor as they earn $2 or less per day and about 112 million (16.2%) survive on $1.25 a day. Of the 500-million odd workforce in India, 33.7% of young workers and 28.5% of adult workers live in extreme poverty ($1.25 a day or less).
Last week, the G20 finance ministers agreed to "develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2% above the trajectory implied by current policies over the coming 5 years". ILO, however, expects this may not be enough to reduce unemployment to the pre-Lehman era.
ILO listed a 11-point agenda to lift employment growth that includes steps to tackle barriers to the creation of formal jobs, skill development, facilitating innovation and entrepreneurship and fostering more public and private employment services. Adopting labour market regulation to facilitate mobility, promotion of well-designed minimum wage setting, collective bargaining mechanisms and strengthening social protection were also part of the ILO agenda.
"Coupled with measures to boost infrastructure investment, support small enterprises and boost skill development, a focus on restoring and improving household purchasing power, especially at low income levels, is essential if a slide into a low growth trap is to be avoided," ILO director-general Guy Ryder said at the IMF-World Bank spring meeting.
Global unemployment continues to rise and touched 202 million in 2013 as many workers who lost their jobs after the Lehman crisis could not get. Had the pre-crisis trends in employment growth continued, ILO estimates 62 million more women and men would have been in work in 2013. Unless growth picks up, that gap will widen further to 75 million by 2018, it said.
What's worrying is that the number of workers in extreme poverty or living on less than