World Economy

Global Economy Still Not Creating Enough Jobs

The report notes that the number of workers in vulnerable forms of employment, such as own-account workers and contributing family workers, is likely to increase in the years to come
ILO says unemployment stands at more than 192 million people globally.ILO says unemployment stands at more than 192 million people globally.

The global unemployment rate is expected to tick down in 2018, the United Nations said Monday, while warning that far too many workers still live in desperate poverty.

The International Labor Organization forecast a worldwide unemployment rate of 5.5% this year, a marginal improvement on the 5.6% recorded in 2017, thanks to broad economic growth, news outlets reported.

But in its flagship World Employment and Social Outlook trends report, the ILO also raised serious red flags about the health of the planet’s labor market. However, unemployment—which the ILO says stands at more than 192 million people globally—is expected remain persistently high in many parts of the world.

The labor situation has improved in emerging and developing economies, as well. However, the report warns that employment growth in these countries will not keep pace with the increased numbers of people entering the labor market.

“Even though global unemployment has stabilized, decent work deficits remain widespread: the global economy is still not creating enough jobs,” the organization’s director general, Guy Ryder, said in a statement.

A key problem is the abundance of “vulnerable employment”, a category that includes informal work arrangements with little or no social and contractual protections. “The significant progress achieved in the past in reducing vulnerable employment has essentially stalled since 2012,” the ILO said.

  Problems in Developing World

The problem is most acute in the developing world, where three out of every four workers have a “vulnerable” employment status, the report said. The study’s lead author, ILO economist Stephan Kuhn, pointed out that 40% of all employed people in the developing world still live in “extreme poverty”, AFP reported.

“Very much more effort needs to be made to improve the quality of jobs,” he said. “Despite the uptick in economic and employment growth, which is welcome, working conditions are failing to improve for a very large share of the global workforce. In addition, the projected employment growth in the service sector can be expected to make only a limited contribution to the improvement of job quality.”

 Vulnerable Employment on the Rise

The report also notes that the number of workers in vulnerable forms of employment, such as own-account workers and contributing family workers, is likely to increase in the years to come. Globally, the significant achievements had been made in reducing vulnerable employment but progress has essentially stalled since 2012.

In 2017, about 42% of workers, or 1.4 billion, worldwide were estimated to be in vulnerable forms of employment. This share was expected to remain particularly high in developing and emerging countries, at above 76% and 46%, respectively. Worryingly, the number of people in vulnerable employment is projected to increase by 17 million in each of 2018 and 2019.

Similarly, the global labor market has seen only weak progress in addressing the problem of ‘working poverty’, or living under poverty lines despite employment, the report says. In 2017, extreme working poverty remained widespread, with more than 300 million workers in emerging and developing countries having a per capita household income or consumption of less than $1.90 per day.

“In developing countries though, progress in reducing working poverty is too slow to keep up with the expanding labor force. The number of workers living in extreme poverty is expected to remain stubbornly above 114 million for the coming years, affecting 40% of all employed people in 2018,” explains Kuhn.

Emerging countries, on the other hand, achieved significant progress in reducing extreme working poverty, which is expected to affect less than 8%, or around 190 million, of workers there in 2017.

  At WEF Summit

Uneven economic growth and the huge concentration of global wealth in the hands of very few is expected to be a key topic at the World Economic Forum’s annual meeting in Davos, which opened Tuesday.

The charity group Oxfam reported Monday that 82% of the wealth created in 2017 was controlled by the world’s richest 1%.

For Ryder, broadening the benefits of economic growth remains the key priority. “Additional efforts need to be put in place to ensure that the gains of growth are shared equitably,” he said.

The report’s authors say the gender gap remains wide, with women more likely to have lower-quality jobs and lower salaries than men.

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