ILO: Global unemployment situation 'alarming'

07/05/2012

According to the UN's International Labour Organisation, prospects for improving the employment rate in the short-term are dim, but there are measures that should help over time.

By Svetla Dimitrova for Southeast European Times in Sofia -- 07/05/12

Growing numbers of jobless increasingly rely on unemployment bureau benefits. [Reuters]

The situation in the global employment market is alarming and unemployment is expected to reach 202 million people this year, or 6.1% of the global labour force, heightening the risk of social unrest throughout the world, the International Labour Organisation (ILO) said in its World of Work Report 2012 released last week.

ILO experts said the unemployment crisis is unlikely to end within the next four years, and this is particularly so for the advanced European economies.

Within the EU, Spain has the highest unemployment rate with 23.6% followed by Greece with 21%, Ireland with 15%, Portugal with 14.7% and Bulgaria with 12.4%.

In the region, unemployment also increased in Croatia, Cyprus, Moldova and Romania.

Even in countries like Macedonia and Turkey, which increased job creation, the employment rate remained below the world average of 60%.

In the EU, the growth in unemployment is a result of a shift to fiscal austerity and tough labour market reforms, according to the ILO.

"Austerity has not produced more economic growth," Reuters quoted Raymond Torres, the report's lead author, as saying.

"The ill-conceived labour market reforms … in situations of crisis tend to lead to more job destruction and very little job creation, at least in the short term," Torres added.

The report argued that to ensure a sustainable job recovery, authorities must address growing youth unemployment, which plagues most of the developed and two-thirds of the developing countries.

Nikolay Velkov, a 28-year-old Sofia resident with a degree in finance, may be typical of the young skilled professionals. Velkov lost his job over a year ago and has sent over 600 resumes to potential employers since with no result.

"I have the feeling that some job advertisements are not real. Most often I am told they have already found someone. Others offer a discouragingly low salary."

Long-term unemployment is another issue to address, the report said, as over 36% of job-seekers in developed countries have been without work for more than 12 months.

Bulgaria, Cyprus, Greece and Romania are among a host of other countries where the incidence of non-standard work has increased.

Bulgarian librarian Anna Nikolova, a resident of Sofia in her 50s, told SETimes she has lost hope of finding a regular job again.

"In the past five years I have been able to find only some temporary or part-time jobs. In 2009, I worked as a shop assistant on three-month probation. At the end of that period, the owner told me he could not afford to keep me, or to pay me the salary for the last month," Nikolova said.

Investment is volatile due to small enterprises facing difficulties in obtaining credit in the developed countries, and that has exacerbated job precariousness, the report said.

Continuing the 2011 austerity measures would lead to the creation of only 0.8 million jobs, but a more employment-friendly approach would yield much better results.

"An increase in expenditure in public investment and social benefits -- of 1% each year -- financed by an increase in revenues derived from indirect taxation, seems to be the most effective policy mix in terms of employment creation," it said.

The ILO estimated the measure would create 2.1 million jobs in one year.

The measure would not solve the problem, according to Daniel Gros, the director of the Centre for European Policy Studies. "But for Southern Europe, it makes sense and makes a small contribution," he told SETimes.

The UN’s ILO also warned that the risk of social tensions increased last year as people have become more anxious about the lack of decent jobs.

"In 57 out of 106 countries, the Social Unrest Index, developed for the purposes of this report, increased in 2011 compared to 2010. Europe, the Middle East, North Africa and sub-Saharan Africa show the most heightened risk of social unrest."

This content was commissioned for SETimes.com.