Wednesday, January 20, 2016

ILO predicts a gloomy future

International Labour Organization predicts joblessness will surpass 200 million by end of 2017 for the first time on record, a rise by 3.4 million in two years. Guy Ryder, the ILO director general, said: “Many working women and men are having to accept low-paid jobs, both in emerging and developing economies, and also increasingly in developed countries. Despite a drop in the number of unemployed in some EU countries and the US, too many people are still jobless. We need to take urgent action to boost the number of decent work opportunities or we risk intensified social tensions.” 

The effects of last year’s economic slowdown would play out in higher unemployment in 2016, particularly in Asia, Africa, Latin America and the Middle East. Developing markets in those areas will bear the brunt of increased joblessness after the prices of oil and other commodities tumbled in response to slowing growth, the ILO said.

Raymond Torres, one of the report’s authors, said market turmoil at the start of 2016 meant his already gloomy predictions could prove overly optimistic. The International Monetary Fund cut its global growth forecast. “There are risks and they are mainly on the downside,” Torres said. “We don’t know the exact dimensions of the slowdown in China. The labour market impact is one of the unknowns because we are going into uncharted territory.” The ILO said oil producers such as Brazil, Nigeria and Russia could suffer social instability as unemployment rose. Brazil has experienced bouts of protest and social disorder in response to spending cuts, tax rises and joblessness. Torres said: “In these countries, there are shrinking budgets for social protection, food subsidies and so on. When measures like this are taken, it can fuel social tensions.”

Torres said the expected rise in unemployment to 200 million was coupled with increasing insecurity, as solid jobs are replaced by unstable work in developing and developed countries. “It’s not just unemployment – underemployment is going in the same direction. There are lower participation rates in India but also in the US, where people have dropped out of the labour market, and also in the UK, where for some groups there is low participation.” Torres said poor quality, unstable jobs remained a problem for the UK and that welfare changes needed to maintain support for people struggling to find work. Low-paid, insecure jobs weaken the economy by reducing the living standards of those most likely to spend money, he said.

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