This report assesses the employment and social impacts of the recent global slowdown and examines longer term socio-economic consequences associated with the prolonged period of economic turbulence that started in 2008. The world economy continues to expand at rates well below the trends that preceded the advent of the global crisis in 2008 and is unable to close the significant employment and social gaps that have emerged. The challenge of bringing unemployment and underemployment back to pre-crisis levels now appears as daunting a task as ever, with considerable societal and economic risks associated with this situation. The analysis uses available employment, wages, growth, and social unrest data gathered by the ILO and other institutions.
Key Findings:
- The global employment gap caused by the crisis continues to widen. Global unemployment is expected to increase by 3 million in 2015 and by a further 8 million in the following four years. An additional 280 million jobs need to be created by 2019 to close the global employment gap caused by the crisis. Youth, especially young women, continue to be disproportionately affected by unemployment. The youth unemployment rate is practically three times higher than is the case for their adult counterparts. The heightened youth unemployment situation is common to all regions and is occurring despite the trend improvement in educational attainment, thereby fuelling social discontent.
- The employment situation is improving in some advanced economies, while remaining difficult in much of Europe and is deteriorating in emerging and developing economies. As a consequence, the improvements in vulnerable employment have stalled in emerging and developing countries. The number of workers in vulnerable employment has increased by 27 million since 2012, and currently stands at 1.44 billion worldwide. Progress in reducing working poverty has slowed. At the end of this decade, still one out of 14 workers is expected to live in extreme poverty conditions.
- Income inequalities have widened, delaying global economic and job recovery. On average, in the countries for which data are available, the richest 10 per cent earn 30–40 per cent of total income. By contrast, the poorest 10 per cent earn around 2 per cent of total income. Rising inequalities have also undermined trust in government, with a few exceptions. The report estimates that social unrest has gradually increased as joblessness persists. Countries facing high or rapidly rising youth unemployment are especially vulnerable to social unrest.
Recommendations:
- Aggregate demand and enterprise investment need to be bolstered, including through well-designed employment, incomes’, enterprise and social policies. Credit systems should be reoriented to support the real economy, notably small enterprises. The weakness in the Euro area needs to be addressed with conviction. And, mounting inequalities must be addressed through carefully designed labour market and tax policy.
- There is also scope for addressing the persistent social vulnerabilities associated with a fragile job recovery, notably high youth unemployment, long-term unemployment and labour market exit, particularly among women. This means carrying out inclusive labour market reforms so as to support participation, promote job quality and update skills.
