Monday, February 2, 2009

Global Unemployment Trends 2009 Report

The global economic crisis is expected to lead a dramatic increase in the number of people joining the ranks of the unemployed and working poor and those in vulnerable employment, states the Global Unemployment Trends 2009 Report, released recently by the International Labour Organisation (ILO). The report states that global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million with the situation likely to deteriorate.
Realistic Message
Based on new development in the labour market, the report states that some 200 million workers, mostly in developing economies, could be pushed into extreme poverty if the situation worsened. In fact, the ILO message is realistic, not alarmist. People are facing a global jobs crisis. Many Governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession.
The 2009 report states that based on November 2008 International Monetary Fund (IMF) forecasts, the global unemployment rate would rise to 6.1 per cent in 2009 compared to 5.7 per cent in 2007, resulting in an increase of the number of unemployed by 18 million people in 2009 in comparison with 2007.
If the economic outlook deteriorates beyond what was envisaged in November 2008, “which is unlikely”, the global unemployment rate could rise to 6.5 per cent, corresponding to an increase of global number of unemployed by 30 million people in comparison with 2007, the report states. These are truly dismal tidings as the ILO recognizes that the unprecedented economic stimulus packages announced by various Governments to boost growth will take time to have an effect. The crisis will only worsen before it gets better.
Absence of an evolved social security system could make South Asian countries, including India, feel the pinch further, although the unemployment rate (5.4 per cent) is expected to be much lower than those in Europe and America, according to the report. In South Asia, East Asia and sub-Saharan Africa, the majority of workers do not enjoy the possible security that wage and salary jobs could provide.
Negative Growth
However, the epicenter of global joblessness is the developed economies that are widely expected to experience negative growth in 2009. But this spectre haunts the developing world as well. The severe downturn is expected to result in a sharp rise in working poverty and vulnerable employment. The latter includes contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship.
As per the ILO’s worst case scenario, the number of working poor—people who are unable to earn sufficient enough to lift themselves and their families above the $2 per person, per day—may rise to 1.4 billion, or 45 per cent of all the world’s employed. The proportion of people in vulnerable employment could reach a level of 53 per cent of the employed population.

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