Leaders must focus stimulus efforts on job creation – UN labour chief

The head of the United Nations labour agency has urged governments to aim their economic rescue packages at forestalling a “prolonged and severe” jobs crisis that would lead to a massive increase in unemployment.

UN International Labour Office (ILO) Director-General Juan Somavia issued the call ahead of the meeting of so-called Group of 20 (G-20) summit to be held in London next week, where world leaders will discuss a common response to the current global economic crisis.

Mr. Somavia characterized international coordination to tackle the current global economic crisis so far as weak, adding that “the financial, trade, economic, employment and social roots of the global crisis are interlinked and so must be the policy responses.”

An ILO International Institute for Labour Studies report, entitled “The Financial and Economic Crisis: A Decent Work Response,” noted that 90 million new jobs will have to be created during 2009-2010 to absorb new entrants to the labour market and avoid a protracted period of unemployment.

“We need to implement a coherent and coordinated job-oriented recovery strategy, based on sustainable enterprises, as soon as possible,” said the ILO head, warning that a delay in stimulus efforts would extend and deepen the jobs crisis, with employment only starting to recover from 2011.

Highlighting a need for global solutions to the crisis, he said that a lack of coordination diminishes the overall effect of stimulus measures, making each individual country reluctant to move faster than its trading partners and intensify the recession.

The ILO report also warned that trade protectionism would further depress world demand and that wage deflation or weaker workers’ rights would not only aggravate the crisis, but be perceived as unfair and aggravate social problems.