Macroeconomics

ILO global employment trends 2010 — unemployment reaches highest level on record in 2009

MANILA (ILO News) – The number of jobless worldwide reached nearly 212 million in 2009 following an unprecedented increase of 34 million compared to 2007, on the eve of the global crisis, the International Labour Organization (ILO) said in its annual Global Employment Trends report — [pdf 11603 KB]. Based on IMF economic forecasts, the ILO estimates that global unemployment is likely to remain high through 2010.

The South-East Asia and the Pacific region, which includes the Philippines, has a number of economies that are highly dependent upon foreign trade and investment flows. Accordingly, among the Asian regions, it has been the hardest hit by the crisis in terms of reduced economic growth.

“In the Philippines, the unemployment rate in 2009 only increased slightly to 7.5 per cent. However, it could have been worse without stimulus measures taken by the government, workers and employers,” said Ms Linda Wirth of ILO Manila. “The report warns us of a W-shaped recovery. It is possible for the economy and employment to grow but the rate of growth is likely to slow or dip, so it is crucial to have job protection policies in place,” added Ms Wirth.

The report says that coordinated stimulus measures have averted a far greater social and economic catastrophe; yet millions of women and men around the world are still without a job, unemployment benefits or any viable form of social protection.

The number of workers in vulnerable employment in the South-East Asia Pacific region is estimated to have increased by up to 5 million since 2008. The regional unemployment rate rose by 5.6 per cent in 2009, and is expected to remain steady in 2010. More than half of all workers in South-East Asia and the Pacific live on less than USD 2 a day, with around a quarter living on less than USD 1.25 a day.

“The issue is not just open unemployment but vulnerable employment, underemployment and a rise in the number of working poor as income shrink. We see workers living on the margin and at risk of falling further into poverty. Many workers who have lost their jobs in export-oriented industries cannot afford to remain unemployed and instead will take any form of employment in the informal sector to have some income, perhaps in farming or street vending,” said Ms Wirth.

The ILO report says that it is urgent to establish wide coverage of basic social protection schemes to cushion the poor against the devastating effects of sharp fluctuations in economic activity.

The ILO also warned that the number of unemployed youth worldwide increased by 10.2 million in 2009 compared to 2007, the largest hike since 1991. In South-East Asia and the Pacific region, young people remain far more likely than adults to be unemployed, with the region’s youth unemployment rate reaching 15.3 per cent in 2009, versus a rate of only 3.4 per cent for adults. Young workers already faced substantial difficulties accessing decent and productive jobs prior to the economic crisis and the situation for youth has worsened as a result of the economic downturn.

Other key findings in the Global Employment Trends, January 2010 — [pdf 11603 KB]:

• The global unemployment rate rose to 6.6 percent in 2009, an increase of 0.9 percentage points over 2007. However, it varied widely by region, ranging from 4.4 per cent in East Asia to more than 10 per cent in Central and South-Eastern Europe (non-EU) and Commonwealth of Independent States (CSEE & CIS) as well as in North Africa;
• The global youth unemployment rate rose by 1.6 percentage points to reach 13.4 per cent in 2009 relative to 2007. This represents the largest increase since at least 1991, the earliest year for which global estimates are available;
• The overall impact of the economic crisis on women and men is far more important than the differences in impact between these groups;
• Preliminary estimates of growth in labour productivity, measured as output per worker, indicate that productivity levels fell in all regions except East Asia, South Asia and North Africa. The largest decline in output per worker occurred in Central and South-Eastern Europe (non- EU) & CIS, - 4.7 per cent, thus reversing part of the gains that were made in the first half of the decade; and
• As a result of declining output per worker, working conditions are deteriorating especially in regions where labour productivity was already low preceding the economic crisis, such as in Sub-Saharan Africa.

To address these issues, the ILO constituents (governments, workers and employers) which represent the “real economy” have agreed on a Global Jobs Pact in June 2009 that contains a balanced set of tried and tested measures to promote a robust response to the employment challenge. These focus on accelerated employment generation, sustainable social protection systems, respect for labour standards, and strengthening social dialogue. The Pact has received strong backing from the G20 heads of state and from the UN General Assembly. Rethinking financial and economic policies, with respect to their impact on employment and social protection is essential because we will not get out of the crisis by applying the same policies that led to the crisis in the first place.