The global labour market situation remains uneven and fragile. True, there are encouraging signs of economic recovery in those advanced economies most affected by the global financial crisis which erupted in 2008. Also, a number of emerging and developing countries − including recently in Sub-Saharan Africa − are enjoying relatively robust economic growth. The world economy may thus be growing somewhat faster than over the past three years.
However, the report finds that those economic improvements will not be sufficient to absorb the major labour market imbalances that built up in recent years. First, over the foreseeable future, the world economy will probably grow less than was the case before the global crisis. This complicates the task of generating the over 42 million jobs that are needed every year in order to meet the growing number of new entrants in the labour market.
Second, and more fundamentally, the root causes of the global crisis have not been properly tackled. The financial system remains the Achilles heel of the world economy. The state of many banks is such that many sustainable enterprises, notably small ones, have limited access to credit, thereby affecting productive investment and job creation. Significant financial bubbles have re-appeared in a number of advanced and emerging economies, adding new uncertainties and affecting hiring decisions. Also, global labour incomes continue to increase at a slower pace than justified by observed productivity gains, thus affecting aggregate demand.
Third − and this is an important new finding in view of the post-2015 development debate − little progress is being made in reducing working poverty and vulnerable forms of employment such as informal jobs and undeclared work. If confirmed, this trend would unambiguously delay the achievement of development goals.
To ensure lasting job recovery, the report highlights the role of a strategy that combines short-term measures (job-friendly macroeconomic and labour market policies) with further action to tackle long-standing imbalances. Such a strategy would strengthen the economic recovery and pave the way for more and better jobs.