the growing imbalance between growth and jobs creation. Faced with the fact that growth is not producing enough jobs worldwide, the world’s financial leaders recently gathered in Singapore must focus on more than trade and financial imbalances, says ILO Director-General Juan Somavia. In this article, Mr. Somavia calls for significant policy reforms to deal with global imbalances between growth and job creation.
By Juan Somavia, Director-General, International Labour Organization
2006 is expected to be the fourth consecutive year of global GDP growth of over 4 per cent. And in sub-Saharan Africa, growth is forecast to be the strongest in 30 years. Interest rates still remain relatively low, and corporate profits are at record highs. World trade is forecast to continue growing at around 7 per cent.
Yet even though the growth rate has been more than decent, the quantity and quality of work created are most certainly not. Almost everywhere in the world, access to decent and productive work has simply failed to keep pace with macroeconomic statistics. In the last ten years, official unemployment figures have increased by more than 20 per cent.
Worse still, in large regions of the world, the bulk of new jobs is being created in the over-crowded informal economy where working women and men eke out a living at low productivity and, consequently, low earnings.
Indeed, the absolute number of working poor living on less than $2 a day per person stands today at the same level it did 10 years ago, representing about 50 per cent of the global workforce. All this is creating challenges with profound political and security implications.
Perhaps nowhere do these imbalances stand in more stark relief than in Asia. Granted, the dawn of the ‘Asian century’ has been marked by rapid economic growth – more than double the global average since 1995, with labour productivity rising by about 41 per cent. Yet today Asia is facing a range of “decent work deficits”:
The region is home to more than two-thirds of the world’s poor and nearly half the world’s unemployed youth.
Informal employment as a share of non-agricultural employment ranges from 83 per cent in India, 78 per cent in Indonesia, and 72 per cent in the Philippines, to 51 per cent in Thailand and 42 per cent in the Syrian Arab Republic.
What are some of the major policy avenues needed to address the global jobs imbalance?
(Read the rest of this article on ILO).