[ILO Survey] Global jobless rise hampers efforts to cut poverty

From The Guardian Online

Growth is not addressing world employment needs
· 1.5bn living on below $2 a day is same as 10 years ago

Ashley Seager
Wednesday January 25, 2006
The Guardian

Global unemployment rose to record highs last year in spite of continued strong economic growth, meaning efforts to reduce poverty in a year of increased debt relief and development aid achieved very little, a report reveals.

The annual global employment trends survey from the International Labour Organisation shows that half of the world's 2.85 billion workers are existing on less than the $2 a day poverty line - the same as a decade ago. The number of people in the world without jobs climbed to a record high of 191.8 million last year in spite of the world economy as a whole growing 4.3% - not far below 2004's three-decade high of 5.1%. That represented an increase of 2.2 million on 2004 and 34.4 million over the past decade.

Juan Somavia, the ILO director-general, said: "This year's report shows once again that economic growth alone isn't adequately addressing global employment needs. This is holding back poverty reduction in many countries. We are facing a global jobs crisis of mammoth proportions, and a deficit in decent work that is not going to go away by itself."
The failure of many economies to convert GDP growth into job creation or wage increases, combined with natural disasters and rising energy prices, hit the world's poorest especially hard. Of the 500 million poorest people, only 14.5 million managed to clamber above the $1 a day income level last year.

"Without a chance to get a decent job and work themselves and their families out of poverty, a large segment of the world's population has little hope for a better life," says the report.

The global unemployment rate remained steady in 2005 at 6.3% after two years of falls. It was down from 6.6% a decade ago, however. The biggest rises in unemployment came in Latin America and the Caribbean, where joblessness rose by 1.3 million, more than half the global rise. That took its jobless rate up by 0.3 percentage points to 7.7%. The rate in Central and Eastern (non-EU) Europe rose to 9.7% from 9.5% in 2004. Asia's overall unemployment rate remained steady. East Asia's rate of 3.8% jobless remains the world's lowest. Britain's unemployment rate is around 5% and the developed world's as whole fell to 6.7% last year.

Sub-Saharan Africa's jobless rate stood at 9.7% in 2005 but the region with by far the highest joblessness was the Middle East and North Africa, with 13.2%.

The ILO report shows that the jobs crisis was acute among the young, aged between 15 and 24. These make up half the world's unemployed and are three times as likely to be out of work as adults. The ILO says this is "troublesome" given that the group makes up only a quarter of the world's working population.

Rapid population growth in some parts of the world led to higher employment overall - a rise of 1.5% to 2.85bn - but the employment growth did not match the population growth, hence the rise in unemployment. The ratio of employment to population therefore continued to fall, as it has done for the past decade.

"How many of the new jobs created in 2005 were decent jobs is difficult to estimate at this point but given the experience of the last years it is not likely that this is the majority," the ILO says.

It says the growth of employment in the service sector increased in all regions except the Middle East and North Africa over the past decade. If this trend continues services will soon overtake agriculture as the largest provider of employment. In developed economies only about 5% of people work on the land but in developing countries the figure is much higher.

Mr Somavia said: "In many countries, agricultural workers are leaving a life of rural poverty in the hope of finding something better in the city but end up little or no better off in casual labouring jobs or petty trading. Such issues need to be addressed by policy makers if they are to make sure that the development process will lead to poverty reduction."