Unemployment to rise over next 5yrs as inequality persists

Source: GNA  -  Unemployment will continue to rise in the coming years, as the global economy enters a new period combining slower growth, widening inequalities and turbulence, warns a new International Labour Organization report.

By 2019, more than 212 million people will be out of work, up from the current 201 million, according to the World Employment and Social Outlook – Trends 2015.

“More than 61 million jobs have been lost since the start of the global crisis in 2008 and our projections show that unemployment will continue to rise until the end of the decade.

This means the jobs crisis is far from over so there is no place for complacency,” ILO Director-General Guy Ryder said.

The report which was made available to the Ghana News Agency on Friday said employment situation had improved in the United States and Japan, but remains difficult in a number of advanced economies, particularly in Europe.

It said two regions, South Asia and Sub-Saharan Africa, accounted for three quarters of the world’s vulnerable employment.

According to the report, the employment situation has not improved much in Sub-Saharan Africa, despite better economic growth performance.

It however, said, in the Arab region and parts of Latin America and the Caribbean the employment outlook has deteriorated.

The steep decline in oil and gas prices, if sustained, may improve the employment outlook somewhat in many advanced economies and several Asian countries according to some forecasts.

It noted that by contrast, it would hit labour markets hard in major oil and gas producing countries, notably in Latin America, Africa and the Arab region.

It said young workers aged 15-24 were particularly hit by the crisis, with a global youth unemployment rate of almost 13 per cent in 2014 and a further increase expected in coming years.

The report said by contrast, older workers had fared relatively well since the start of the global financial crisis in 2008, adding that in developing countries, the middle class now makes up more than 34 per cent of total employment.

It said the biggest progress had been in emerging and low-income countries.

“The good news is that the number of workers in vulnerable jobs and working poverty has fallen around the globe.

However, it is still not acceptable that almost half of the world’s workers lack access to basic necessities and decent work,” Ryder said.

“The situation is even worse for women.”

Growing and persistent inequality and uncertain prospects for enterprise investment, the report explains, had made it difficult for countries to rebound from the crisis.

“If low wages lead people to consume less, and investment remains subdued, this obviously has a negative impact on growth. Income inequality in some advanced economies now approach levels observed among emerging economies.

By contrast, the emerging economies made some progress in reducing their high levels of inequality,” said the ILO head.

The report said income inequality will continue to widen, with the richest 10 per cent earning 30 to 40 per cent of total income while the poorest 10 per cent will earn between two and seven per cent of total income.

These trends have undermined trust in governments and kept the risk of social unrest high, the report warns.

It said social unrest was particularly acute in countries and regions where youth unemployment was high or rising rapidly.

The report said in line with the global unemployment rate, social unrest shot up since the beginning of the crisis in 2008, and has now reached levels almost 10 per cent higher than before the crisis.

It said at the global level, the share of both low-skilled, non-routine jobs, such as security personnel and some personal care workers, and high-skilled non-routine cognitive jobs, such as lawyers and software engineers, has increased.

Adding that by contrast, routine middle-skilled jobs – like book-keepers and clerical workers – were declining.

“The trends we see are worrying but we can improve the overall economic picture if we tackle underlying weaknesses, in particular the continued lack of aggregate demand, stagnation in the Eurozone, uncertain prospects for productive investment, especially among small enterprises, and mounting inequality,” said Ryder.