Globalization fails to create new, quality jobs or cut poverty – UN labour report

Global economic growth is increasingly failing to translate into new and better jobs that lead to a reduction in poverty, according to a new report issued by the International Labour Organization (ILO) today.

“The key message is that up to now better jobs and income for the world's workers has not been a priority in policy-making,” ILO Director-General Juan Somavia said of 4th Edition of Key Indicators of the Labour Market (KILM), which notes that currently half the world's workers still do not earn enough to lift themselves and their families above the $2 a day poverty line.

“Globalization has so far not led to the creation of sufficient and sustainable decent work opportunities around the world. That has to change, and as many leaders have already said we must make decent work a central objective of all economic and social policies. This report can be a useful tool for promoting that objective,” he added.

The report notes that within this global trend, different regions show mixed results in terms of job creation, productivity results, wage improvements and poverty reduction.

In parts of Asia economic expansion is fostering solid growth in jobs and better living conditions, while Africa and parts of Latin America are seeing increasing numbers of people working in less favourable conditions, especially in the agricultural sector.

The total number of working women and men living on less than $2 a day has not fallen over the past decade although at 1.38 billion it is a smaller share of global labour at just below 50 per cent, a decline from 57 per cent in 1994, the report says.

In many developing economies the problem is mainly a lack of decent, productive work opportunities rather than outright unemployment. Women and men are working long and hard for very little because their only alternative is to have no income at all.

The report examines 20 key indicators, covering quantitative topics such as labour force participation, employment, inactivity, employment elasticities, sectoral employment, labour productivity and unemployment, and qualitative issues like hours worked, wages, employment status and unemployment duration.

It shows that between 1990 and 2000, wages grew faster in high-skilled jobs globally. Although there was no general deterioration for low-skilled workers, it suggests widening wage inequality between high- and low-skilled workers during the 1990s.

The United States continues to show the highest labour productivity levels measured as value added per person employed while in Central and Eastern Europe, the transition to a market economy led to growth in productivity but a fall in employment.

In other key findings, the KILM shows that:

• Women are continuing to catch up to men in terms of participation in labour markets throughout the world, but they are disproportionately engaged in low-wage, low-productivity and part-time jobs, and in many regions such as the Middle East, North Africa and South Asia, participation in the labour market still lags far behind.

• While the most severe working poverty is growing in Africa, it is declining in Asia and Central and Eastern Europe.

• Youth unemployment rates are typically at least twice as high as adult rates and sometimes much higher, but in most countries illiteracy rates of adults are higher than those of youth, suggesting the young are increasingly better prepared for the labour market.

• Developed economies and the European Union are faced with a growing number of ‘underutilized’ labour resources, including the unemployed and involuntary part-time workers looking for a full-time job. In both France and Italy, this rate reached 21 per cent in 2004, up from 17 per cent in 1994 in France and 12 per cent in Italy.