Global unemployment remains at historic high despite strong economic growth – UN

25 January 2007

The number of people unemployed worldwide remained at an historical high of nearly 200 million in 2006 despite strong global economic growth, only modest gains were made in lifting some of the 1.37 billion working poor living on less than $2 per day out of poverty, and the pattern looks set to continue this year, according to a United Nations report released today.

The number of people unemployed worldwide remained at an historical high of nearly 200 million in 2006 despite strong global economic growth, only modest gains were made in lifting some of the 1.37 billion working poor living on less than $2 per day out of poverty, and the pattern looks set to continue this year, according to a United Nations report released today.

“To make long-term inroads into unemployment and working poverty, it is essential that periods of strong growth be better used to generate more decent and productive jobs,” the UN International Labour Organization (ILO) said in its annual Global Employment Trends. “Reducing unemployment and working poverty through creation of such jobs should be viewed as a precondition for sustained economic growth.”

Even though more people are working globally than ever before, the number of unemployed remained at an all time high of 195.2 million last year, a global rate of 6.3 per cent, almost unchanged from 2005, with a forecast economic growth rate of 4.9 per cent for 2007 likely to ensure that unemployment remains at about the same level.

“The persistence of joblessness at this rate is of concern, given that it will be difficult to sustain such strong economic growth indefinitely,” the report says, noting that that in order to maintain or reduce unemployment rates, the link between growth and jobs must be reinforced.

Creation of decent and productive jobs – not just any jobs – is a prerequisite for reducing unemployment and slashing the number of families working but still living in poverty, which in turn is a precondition for future development and economic growth, it adds.

“The strong economic growth of the last half decade has only had a slight impact on the reduction of the number of workers who live with their families in poverty and this was only true in a handful of countries,” ILO Director-General Juan Somavia said.

For the last decade, economic growth has been reflected more in rising levels of productivity and less in growing employment, the report notes. While world productivity increased by 26 per cent the global number of those in employment rose by only 16.6 per cent.

Unemployment hit young people aged 15 to 24 the hardest, with 86.3 million young people representing 44 per cent of the total unemployed in 2006. The employment gap between women and men persists. In 2006, only 48.9 per cent of women over age 15 were working compared to 49.6 per cent in 1996. The comparable male employment-to-population ratios were 75.7 in 1996 and 74.0 in 2006.

In 2006, the share of the service sector in global employment progressed from 39.5 per cent to 40 per cent and for the first time overtook agriculture, which dropped from 39.7 per cent to 38.7 per cent. The industry sector represented 21.3 per cent of total employment.

The largest decrease in unemployment occurred in the region of the Developed Economies and European Union, with a decline of 0.6 percentage points. East Asia’s rate was 3.6 per cent, remaining the lowest in the world, while the Middle East and North Africa remained the highest at 12.2 per cent. Sub-Saharan Africa stood at 9.8 per cent, the second highest and it also had the highest share in working poverty, with 8 out of 10 people living on less than $2 a day with their families.

The total number of working poor on $1 a day declined between 2001 and 2006 except in Sub-Saharan Africa where it increased by another 14 million and in Latin America and the Middle East and North Africa where it stayed more or less unchanged.

 

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