Worldwide Jobless Recovery

The recent report Global Employment Trends 2011 - The challenge of a jobs recovery (by the International Labour Office in Geneva) reveals that it is not just London or the UK that is experiencing continued high levels of unemployment - especially youth unemployment.

 

 

Global unemployment stood at 205 million in 2010, essentially unchanged from the year earlier and 27.6 million higher than in 2007, with little hope for this figure to revert to pre crisis levels any time soon. The global unemployment rate stood at 6.2 per cent in 2010, versus 6.3 per cent in 2009, but still well above the rate of 5.6 per cent in 2007.

 

The elevated level of global unemployment stands in stark contrast to the recovery that has been seen in several key macroeconomic indicators: real global GDP, private consumption, gross fixed investment and world trade had all recovered by 2010, surpassing pre-crisis levels.

 

Many economies are simply not generating sufficient employment opportunities to absorb growth in the working-age population.

 

 

There has been an uneven recovery in labour markets, with a continued rise in joblessness in the developed economies and European Union region, but a steady to slightly improving unemployment picture in most developing regions.

 

Fifty-five per cent of the total increase in global unemployment between 2007 and 2010 occurred in the developed economies and European Union region, while the region only accounts for 15 per cent of the world’s labour force. Unemployment is projected to decline slightly in 2011, but to a level that is still 15 million (over 50 per cent) higher than in 2007. Another sign of continued labour market distress is the rapid growth of part-time employment

 

Total global employment in industry declined slightly in 2009, which is a major change from the historical annual growth rate of 3.4 per cent over the period from 2002 to 2007. On the other hand, employment in agriculture grew in 2009, which also represented a change from the recent decline.

 

 

The global youth (15-24) unemployment rate stood at 12.6 per cent in 2010, up from 11.8 per cent in 2007. Note: For comparison the London 16-24 not in employment or learning figure was 16% in September 2010. However, unemployment rates understate the severe extent to which the crisis impacted young people as labour force participation among youth was strongly affected by the crisis. Across 56 countries with available data, there are 1.7 million fewer youth in the labour market than expected based on longer term trends, indicating that discouragement among youth has risen sharply. These discouraged youth are not counted among the unemployed because they are not actively seeking work.

 

The massive increase in youth unemployment that occurred in the developed economies and European Union region during the crisis was accompanied by a large decline in youth labour force participation, indicating widespread discouragement among young people.

 

 

The problem of delayed labour market and wage growth can threaten recovery given the link between real wages and consumption.

 

Stagnating progress in reducing vulnerable employment and slowed progress in reducing working poverty. The incidence of vulnerable employment and working poverty remained roughly flat between 2008 and 2009, versus a steady and substantial average decline in the years preceding the crisis.

 

 

Following a contraction in 2009, the global economy grew at a rapid pace of 4.8 per cent in 2010. The recovery is expected to continue in 2011, though at a more moderate pace (4.2 per cent). However, due to the fragile state of the labour market in many countries, high levels of public debt and continued vulnerabilities in the financial sector and private households, risks predominate.

 

On the basis of current forecasts, the global unemployment rate is projected at 6.1 per cent in 2011, corresponding to global unemployment of 203.3 million. This represents little improvement over 2010 levels.

 

Not surprisingly, the report concludes that it is essential to forge a recovery that is job rich and sustainable, but comments that this is a careful tightrope walk from stimulus to fiscal consolidation (reducing debts). It also points out that a narrow focus on reducing deficits without addressing the challenge of job creation will further weaken employment prospects and threaten the recovery.

 

 

The full report can be found by clicking here.
 

Trevor Bottomley
Employment & Labour Market Adviser
Central London Connexions
February 2011
 

The recent report Global Employment Trends 2011 - The challenge of a jobs recovery (by the International Labour Office in Geneva) reveals that it is not just London or the UK that is experiencing continued high levels of unemployment - especially youth unemployment.

 

 

Global unemployment stood at 205 million in 2010, essentially unchanged from the year earlier and 27.6 million higher than in 2007, with little hope for this figure to revert to pre crisis levels any time soon. The global unemployment rate stood at 6.2 per cent in 2010, versus 6.3 per cent in 2009, but still well above the rate of 5.6 per cent in 2007.

 

The elevated level of global unemployment stands in stark contrast to the recovery that has been seen in several key macroeconomic indicators: real global GDP, private consumption, gross fixed investment and world trade had all recovered by 2010, surpassing pre-crisis levels.

 

Many economies are simply not generating sufficient employment opportunities to absorb growth in the working-age population.

 

 

There has been an uneven recovery in labour markets, with a continued rise in joblessness in the developed economies and European Union region, but a steady to slightly improving unemployment picture in most developing regions.

 

Fifty-five per cent of the total increase in global unemployment between 2007 and 2010 occurred in the developed economies and European Union region, while the region only accounts for 15 per cent of the world’s labour force. Unemployment is projected to decline slightly in 2011, but to a level that is still 15 million (over 50 per cent) higher than in 2007. Another sign of continued labour market distress is the rapid growth of part-time employment

 

Total global employment in industry declined slightly in 2009, which is a major change from the historical annual growth rate of 3.4 per cent over the period from 2002 to 2007. On the other hand, employment in agriculture grew in 2009, which also represented a change from the recent decline.

 

 

The global youth (15-24) unemployment rate stood at 12.6 per cent in 2010, up from 11.8 per cent in 2007. Note: For comparison the London 16-24 not in employment or learning figure was 16% in September 2010. However, unemployment rates understate the severe extent to which the crisis impacted young people as labour force participation among youth was strongly affected by the crisis. Across 56 countries with available data, there are 1.7 million fewer youth in the labour market than expected based on longer term trends, indicating that discouragement among youth has risen sharply. These discouraged youth are not counted among the unemployed because they are not actively seeking work.

 

The massive increase in youth unemployment that occurred in the developed economies and European Union region during the crisis was accompanied by a large decline in youth labour force participation, indicating widespread discouragement among young people.

 

 

The problem of delayed labour market and wage growth can threaten recovery given the link between real wages and consumption.

 

Stagnating progress in reducing vulnerable employment and slowed progress in reducing working poverty. The incidence of vulnerable employment and working poverty remained roughly flat between 2008 and 2009, versus a steady and substantial average decline in the years preceding the crisis.

 

 

Following a contraction in 2009, the global economy grew at a rapid pace of 4.8 per cent in 2010. The recovery is expected to continue in 2011, though at a more moderate pace (4.2 per cent). However, due to the fragile state of the labour market in many countries, high levels of public debt and continued vulnerabilities in the financial sector and private households, risks predominate.

 

On the basis of current forecasts, the global unemployment rate is projected at 6.1 per cent in 2011, corresponding to global unemployment of 203.3 million. This represents little improvement over 2010 levels.

 

Not surprisingly, the report concludes that it is essential to forge a recovery that is job rich and sustainable, but comments that this is a careful tightrope walk from stimulus to fiscal consolidation (reducing debts). It also points out that a narrow focus on reducing deficits without addressing the challenge of job creation will further weaken employment prospects and threaten the recovery.

 

 

The full report can be found by clicking here.
 

Trevor Bottomley
Employment & Labour Market Adviser
Central London Connexions
February 2011