Employment at new low in 09; no respite this year, says ILO

Written by fe Bureaus | New Delhi | Updated: Jan 28 2010, 05:07am hrs
An International Labour Office (ILO) report on global employment trends has noted that unemployment was at its highest level in 2009 owing to the economic crisis and is likely to remain high in 2010. While coordinated stimulus measures have averted a great social and economic catastrophe, millions are still without a job, unemployment benefits or any social protection, the ILO has stressed.

In 2009, unemployment rose the sharpest in developed economies and the European Union, a trend that ILO expects to continue in 2010. The number of jobless worldwide reached nearly 212 million in 2009 and barring the developed world, the ILO expects unemployment to stabilise at present levels, or decline only slightly, in other regions. Significantly, the ILO also found the number of unemployed youth worldwide increased by 10.2 million in 2009 as against in 2007, the largest rise since 1991.

The report, however, singles out South Asia as having been spared a larger shock mainly because the largest economiesIndia and Pakistanare less export-reliant than many economies in East Asia and South-East Asia. The regions growth is expected to be 5% in 2009, compared to 6.6% and 8.7% in the two preceding years. The unemployment rate is expected to decline slightly to 4.9% in 2010, as GDP growth is expected to edge higher to 6%.

In India, which accounts for 80% of the regions GDP and 73% of labour force, growth is projected to fall to 5.4% in 2009 versus 7.3% in 2008 and 9.4% in 2007. The regional unemployment rate in South Asia is estimated to have increased to 5.1% in 2009, up from 4.8% 2008, while youth unemployment reached 10.7% in 2009, up from 9.9% in 2008, the ILO report said.

However, the ILO warned that unemployment indicators do not provide a sufficient gauge of labour market health in South Asian economies, simply because the vast majority of the regions workforce cannot afford to be unemployed.

Prior to the onset of the global economic crisis, four out of five workers in South Asia lived with their families on less than $2 a day, with more than 45% living in extreme poverty of less than $1.25 a day. At a minimum, the crisis is likely to have slowed the rate of progress in reducing poverty and increasing the share of higher productivity employment, the ILO said.

While there has been much progress in extending social protection in the region through initiatives such as Indias National Rural Employment Guarantee Act (NREGA), which has provided a significant buffer during the crisis, helping to maintain levels of consumption, poverty and vulnerable forms of employment remain widespread and represent tremendous challenges that must be overcome, it said, singling out the NREGA as good news amidst the gloom.

ILO director-general Juan Somavia urged the world to react. As the World Economic Forum gathers at Davos, it is clear that avoiding a jobless recovery is the political priority. This can be done through strong convergence of public policies and private investment.

With 45 million young women and men entering the global labour market every year, recovery measures must target job creation for our young people.