Concerns on the impact of global slowdown on employment have been gaining attention with the persistent contraction of output reducing the demand for labour. The reports of the biggest job losses have come from the US with the nation losing more than half a million jobs in each of the last four months till March 2009, pushing up unemployment rates to a new high of 8.5%. Estimates show that non-farm employments in the world?s richest nation has been shaved off by more than 5 million from the peak levels reached in December 2007.

Reports on employment losses in the US have got maximum global coverage not just because the country has been among the most hit in the global slowdown but more because it is one of the few nations that keep a meticulous record of the trends in employment and unemployment with surveys bringing out monthly figures with a short time lag of less than a week. Though most other OECD countries follow the US example, their estimates come out with a greater time lag and the reports do not get too much attention even when their employment losses are sometimes higher than in the US.

The developing countries have, however, largely remained outside the purview of the employment debate as data base on employment is outdated, with the number lagging by years, perhaps motivated by the need to keep these figures under the limelight, given the long record of high unemployment and under-employment rates. The worst example is that of India where the employment figures are collected only twice in a decade.

However, these lacunae have not prevented international agencies from collection information on the most recent trends in global employment. Exemplary efforts made by the International Labour Organisation to estimate the global trends now allow us to have some realistic number on the change in employment and unemployment after the advent of recession.

At the global level, the employment generation has deteriorated sharply in recent months. Though the global economy has posted a slowdown since 2008, its affect on employment growth has been limited. In fact, the monthly numbers show that except for a small dip in November 2008 when employment growth dipped to 1.9%, the global growth of employment remained buoyant till December, when it continued to grow at a buoyant 2.3%?the trend rates registered in the first half of the year.

However, the trends have changed sharply in 2009 with employment growth decelerating to 1.1% in January 2009 and then by 1% in February. Countries where the employment declines were the highest in the last 12 months include the US (4.1 million between February 2008 to February 2009), Japan (2,90,000 between February 2008 and February 2009), Canada (2,07,000 between the fourth quarter of 2007 and 2008), France 1,41,000 between the fourth quarter of 2007 and 2008) and UK (75,000 in three months to January 2008 and January 2009).

The trends in developing countries, including the Bric economies are equally disturbing. Reports from China say that 20 million factory workers on the industrialised Eastern coast of China have lost work and migrated back to the rural areas. In India, employment in eight export-oriented sectors in India fell by over 3% in the last quarter of 2008. South Africa is estimated to lose about 2,50,000 jobs from the crisis. There has been a dramatic reversal of the employment gains made by the Central and Eastern European countries. And significant job losses have also been reported in developing countries that are heavily dependent on a narrow export base. The large job losses across nations is very disturbing given that the size of the global labour force is expected to go up by 90 million during 2009-10 and the national governments would have the challenging task of creating meaningful employment to these.

The brunt of the fall in global employment has been borne by the manufacturing sector. Trends show that the growth of employment decelerated sharply from a peak level of 2.4% in June 2008 to 0.1% in October and then declined sharply in the next four months with the trends accelerating from 1.5% in November 2008 to 7.1% in February 2009. The bulk of the decline in manufacturing employment has been in the developed countries, especially the US and the EU where industrial production has declined by as much as 10% in the most recent month. Japan, where industrial output has slumped by almost a third, would also have been heavily affected. In the case of the developing countries, the countries most affected by the industrial slowdown are Russia and Brazil, where output has declined by 30% in January 2009. India, where growth has entered the negative territory, too would have been affected.

However, despite the positive growth in global employment in 2008, the addition to the global labour force during this period has had a negative impact on the unemployment levels. Unemployment levels, which steadily decreased in the first seven months of 2008 have reversed trends July 2008 onwards. Global unemployment growth picked up by 2.4% in

August 2008 and it rose to 8.2% by December. The growth of unemployment level has intensified in 2009 with the rates picking up to 12.1% in January 2009 and further to 22.4% in February. And the most recent ILO annual estimates show that the number of unemployed globally increased by 14 million in 2008 after four years of consecutive declines. Consequently, global unemployment rates are estimated to have gone up from 5.7% in 2007 to 6% in 2008.

The negative trends in the employment sphere would also have repercussions on the wages in the informal economy where the bulk of the global poor are engaged in production due to the reduction in the number of working days downward pressure on wages in the informal economy. The ILO estimates the incidence of working poverty, based upon a threshold of $2 per day, will go up by as much as 75 million with the bulk of the increase coming from South Asia (33 million), Sub-Saharan Africa (20 million), South East Africa and Pacific (15 million) and North Africa (4 million), which could compromise the attainment of the millennium development goals.

?p.raghavan@expressindia.com