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Global crisis to trigger more unemployment: ILO

January 28, 2009 18:24 IST

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The global economic crisis is expected to lead to a 'dramatic increase' in the number of people joining the ranks of the unemployed and working poor and those in vulnerable employment, says the ILO.

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, the International Labour Organization said in its annual Global Employment Trends report released on Wednesday.

Based on new developments in the labour market, the report said some 200 million workers, mostly in developing economies, could be pushed into extreme poverty if the situation worsened.

"The ILO message is realistic, not alarmist. We are now 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," ILO director-general Juan Somavia said in a statement from Geneva.

The latest report said that based on November 2008 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 likely', the global unemployment rate could rise to 6.5 per cent, corresponding to an increase of the global number of unemployed by 30 million people in comparison with 2007, it said.                                                                                

The new report updates a preliminary estimate released last October indicating that the global financial crisis could increase unemployment between 15 to 20 million people by 2009.

In a current worst case scenario, the global unemployment rate could rise to 7.1 per cent and result in an increase in the global number of unemployed of more than 50 million people, it said.

The number of working poor -- people who are unable to earn enough to lift themselves and their families above the $2 per person per day poverty line -- may rise up to 1.4 billion.

In 2009, the proportion of people in 'vulnerable employment' could rise considerably in the worst case scenario to reach a level of 53 per cent of the employed population, the report said.

Vulnerable employment covers workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship.

The report said the economic crisis of 2008 has deepened the concern over the social impacts of globalisation which the ILO had previously raised.

Observing that a huge labour potential remained untapped worldwide, it said there was need to take measures to support vulnerable groups in the labour market, such as youth and women.

Economic growth and development could be much higher if people are given the chance of a decent job through productive investment and active labour market policies, it said.

The report noted that in 2008, North Africa and West Asia still had the highest unemployment rates followed by Central and South Eastern Europe (non EU) and the Commonwealth of Independent States (CIS), sub-Saharan Africa and Latin America.

The lowest unemployment rate was observed in East Asia, followed by South Asia and South-East Asia and the Pacific in 2008.

The report showed that South Asia, South-East Asia and the Pacific and East Asia accounted for 57 per cent of global employment creation in 2008.

It said that compared to 2007, the largest increase in a regional unemployment rate was observed in the Developed Economies and European Union region.

According to the study, sub-Saharan Africa and South Asia stand out as regions with extremely harsh labour market conditions and with the highest shares of working poor of all regions.

Somavia felt that the Decent Work Agenda was an appropriate policy framework to confront the crisis. "There is a powerful message that tripartite dialogue with employers and workers organisations should play a central role in addressing the economic crisis," he said.

"The crisis is underscoring the relevance of the ILO Decent Work Agenda," he said and called on the upcoming meeting of the G-20 in April in London to urgently agree on priority measures to promote productive investments, decent work and social protection objectives, and policy coordination.

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