ILO says 51-million jobs may go
29 January 2009

Up to 51-million jobs worldwide could vanish because of the global financial crisis, and many of those who kept their jobs could expect an erosion of their conditions of employment, the International Labour Organisation (ILO) warned.

The ILO says in its global employment trends report that, based on developments in the labour market and depending on the timeliness and effectiveness of recovery efforts, global unemployment this year could increase by between 18-million and 30-million workers, and more than 50-million if the situation continued to deteriorate.

The ILO warned that in a worst-case scenario, about 200-million workers, mostly in developing economies, could be pushed into extreme poverty, earning $1,25 or less a day. ILO director-general Juan Somavia said: “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 co-ordinated 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,” Somavia said.

The report, which is based on various scenarios, says that at best the global unemployment rate could rise to 6,1% — 18-million people — this year compared with 5,7% in 2007, while the worst case was 7,1% — more than 50-million people.  The document says there will be a sharp increase in the number of working poor people — those who earn $2 and less a day.  Altogether 1,4-billion people, or 45% of the world’s population, will fall into this category.

SA, like other countries, has been hard hit, with Stanlib’s Kevin Lings saying yesterday that he expected local employment to decline by 1,5%, reflecting 250000 job cuts, over 12 months, starting in the third quarter of last year.  Job creation has been the main feature of political party manifestos released ahead of this year’s elections.

The ILO says that sound policy is necessary, and in developed and developing economies measures should be focused on vulnerable groups, such as women and youths, who are more likely to be pushed into poverty. Special attention should be paid to small and medium enterprises as they account for the bulk of employment and are affected most by the credit crunch as they often have difficulties accessing credit in good economic periods.

Policies should also be aimed at “green jobs”, which would see the creation of low-carbon, employment-intensive, and poverty reducing growth. The report suggests construction and rehabilitation of physical infrastructure such as roads and bridges as another employment opportunity.  “It is evident that the world is facing a dramatic and unprecedented crisis that calls for creative solutions,” it said.

North Africa and the Middle East had the highest unemployment rate at the end of last year, at 10,3% and 9,4% respectively. Central and southeastern Europe and the former Soviet republics ended last year with a jobless rate of 8,8%, sub-Saharan Africa’s was 7,9% and Latin America’s was 7,3%. 

Amy Musgrave, www.businessday.co.za