[Excerpt] The global financial crisis has triggered a serious slowdown in world economic growth including recession in the largest industrialized countries. Enterprises have stopped hiring and many are laying off workers in considerable numbers. This report examines what we know already about the impact of the crisis on jobs and what we could expect from several possible scenarios of the way it might evolve in the year ahead.
In 2008, an estimated 6.0 per cent of the world’s workers were not working but looking for a job, up from 5.7 per cent in 2007. Experience shows that the longer people stay out of work the more their “employability” deteriorates, making it progressively harder to get back into work. This is especially worrying for young workers who may get trapped into a lifetime of weak attachment to the labour market alternating between low paid insecure work and outright unemployment.
In many developing countries well over half of the workforce is employed in conditions that fall short of decent work, and breaking out of such situations is at the core of the global development challenge set out in the Millennium Declaration and its poverty-reducing goals. This report utilizes working poor and those in vulnerable employment (i.e. unpaid contributing family workers and own-account workers) which are workers most likely to be characterized by low and insecure employment, low earnings and productivity to help better understand labour market trends in developing economies.
By the end of 2008 working poverty, vulnerable employment and unemployment were beginning to rise as the effects of the slowdown spread. If the recession deepens in 2009, as many forecasters expect, the global jobs crisis will worsen sharply. Furthermore, we can expect that for many of those who manage to keep a job, earnings and other conditions of employment will deteriorate.
A central part of people’s lives is at work, and whether women and men have decent work has a significant impact on individual, family and community well-being. The absence of decent and productive work is the primary cause of poverty and social instability. The trends summarized in this report are therefore extremely worrying and serve to highlight the importance of an internationally coordinated effort to stop the slowdown and start the global economy on to a much more sustainable path.
The assessment in this issue of Global Employment Trends is based on an analysis of labour market data that are available to date. This is still limited for the majority of countries and as more information becomes available it will be important to review the scale and pace of trends. Alternative scenarios for selected labour market indicators in 2008 and 2009 illustrate what might happen in labour markets if currently available economic forecasts are further revised downwards as seems likely.
This report starts with an overview of economic events that are shaping labour market outcomes. Thereafter, an analysis of recent labour market developments is presented based on currently available information (see Annex 1 for tables referred to in this report; Annex 2 for scenarios; Annex 3 for regional figures and groupings of economies; and Annex 4 for a note on the methodology used to produce world and regional estimates). A separate section is dedicated to the projections of labour market indicators for 2008 and 2009 (see Annex 5 for methodological details). A final section concludes, and highlights a number of policy considerations.