The global economic crisis is expected to lead to
a dramatic increase in the number of people joining the ranks of the unemployed,
working poor and those in vulnerable employment, the International Labour Office
(ILO) says in its annual Global Employment Trends report (GET).
Based on new developments in the labour market and depending on the
timeliness and effectiveness of recovery efforts, the report says global
unemployment in 2009 could increase over 2007 by a range of 18 million to 30
million workers, and more than 50 million if the situation continues to
Danger of extreme poverty
The ILO report also said that in this last scenario some 200 million workers,
mostly in developing economies, could be pushed into extreme poverty.
“The ILO message is realistic, not alarmist. We are now facing a global jobs
crisis. Many governments are aware and acting, but more decisive and coordinated
international action is needed to avert a global social recession. Progress in
poverty reduction is unravelling and middle classes worldwide are weakening. The
political and security implications are daunting”, said ILO Director-General,
“The crisis is underscoring the relevance of the ILO Decent Work Agenda. We
find many elements of this Agenda in current measures to promote job creation,
deepening and expanding social protection and more use of social dialogue”, Mr.
Somavia said. He called on the upcoming meeting of the G-20 on 2 April in
London, alongside financial issues, to urgently agree on priority measures to
promote productive investments, decent work and social protection objectives,
and policy coordination.
Key projections of the GET report
The new report updates a preliminary estimate released last October
indicating that the global financial crisis could increase unemployment between
15 to 20 million people by 2009. Its key conclusions are as follows:
- Based on November 2008 IMF forecasts, the global unemployment rate would
rise to 6.1 per cent in 2009 compared to 5.7 per cent in 2007, resulting in an
increase of the number of unemployed by 18 million people in 2009 in comparison
- If the economic outlook deteriorates beyond what was envisaged in November
2008, which is likely, the global unemployment rate could rise to 6.5 per cent,
corresponding to an increase of the global number of unemployed by 30 million
people in comparison with 2007.
- In a current worst case scenario, the global unemployment rate could rise to
7.1 per cent and result in an increase in the global number of unemployed of
more than 50 million people.
- The number of working poor – people who are unable to earn enough to lift
themselves and their families above the US$2 per person, per day, poverty line,
may rise up to 1.4 billion, or 45 per cent of all the world’s employed.
- In 2009, the proportion of people in vulnerable employment – either
contributing family workers or own-account workers who are less likely to
benefit from safety nets that guard against loss of incomes during economic
hardship – could rise considerably in the worst case scenario to reach a level
of 53 per cent of the employed population.
The ILO report notes that in 2008, North Africa and the Middle East still had
the highest unemployment rates at 10.3 and 9.4 per cent respectively, followed
by Central & South Eastern Europe (non EU) & the Commonwealth of
Independent States (CIS) at 8.8 per cent, sub-Saharan Africa at 7.9 per cent and
Latin America at 7.3 per cent.
The lowest unemployment rate was once again observed in East Asia at 3.8 per
cent, followed by South Asia and South-East Asia & the Pacific where
respectively 5.4 and 5.7 per cent of the labour force was unemployed in
The report shows that the three Asian regions – South Asia, South-East Asia
& the Pacific and East Asia – accounted for 57 per cent of global employment
creation in 2008. In the Developed Economies & European Union region, on the
other hand, net employment creation in 2008 was negative, minus 900,000 which
explains in part the low global employment creation in this year.
Compared with 2007, the largest increase in a regional unemployment rate was
observed in the Developed Economies & European Union region, from 5.7 to 6.4
per cent. The number of unemployed in the region jumped by 3.5 million in one
year, reaching 32.3 million in 2008.
According to the study, sub-Saharan Africa and South Asia stand out as
regions with extremely harsh labour market conditions and with the highest
shares of working poor of all regions. Although the trend has been declining
over the past ten years, around four fifths of the employed were still
classified as working poor in these regions in 2007.
The economic crisis of 2008 has deepened the concern over the social impacts
of globalization which the ILO had previously raised. Stressing the need to take
measures to support vulnerable groups in the labour market, such as youth and
women, the ILO report observes that a huge labour potential remains untapped
worldwide. Economic growth and development could be much higher if people are
given the chance of a decent job through productive investment and active labour
“The Decent Work Agenda is an appropriate policy framework to confront the
crisis. There is a powerful message that tripartite dialogue with employers and
workers organizations should play a central role in addressing the economic
crisis, and in developing policy responses”, Mr. Somavia said.
The report lists a number of ILO recommended policy measures being applied by
many governments, as discussed by the ILO Governing Body in November of 2008,
i) wider coverage of unemployment benefits and insurance schemes,
re-skilling redundant workers and protecting pensions from devastating declines
in financial markets;
ii) public investment in infrastructure and housing, community
infrastructure and green jobs, including through emergency public works;
iii) support to small and medium enterprises;
iv) social dialogue at enterprise, sectoral and national levels.
If a large number of countries, using their own accumulated reserves,
emergency IMF loans and stronger aid mechanisms, put in place coordinated
policies in line with the ILO Decent Work Agenda, then the effects of the
downturn on enterprises, workers and their families could be cushioned and the
recovery better prepared.(ILO/AG)