Business News of 2014-01-20

Global unemployment increases by 5m people

The International Labour Organisation (ILO) on Monday said that about 202 million people worldwide were unemployed in 2013, an increase of almost 5 million compared with the 2012 figure.

It said the uneven economic recovery and successive downward revisions in economic growth projections had had an impact on the global employment situation, adding that this reflects the fact that employment is not expanding sufficiently fast to keep up with the growing labour force.

The ILO’s “Global Employment Trends 2014: The risk of a jobless recovery” report which was made available to the Ghana News Agency in Accra by the ILO said the bulk of the increase in global unemployment is in the East Asia and South Asia regions, which together represent more than 45 per cent of additional jobseekers, followed by Sub-Saharan Africa and Europe.

It said by contrast, Latin America added fewer than 50,000 additional unemployed to the global number – or around 1 per cent of the total increase in unemployment in 2013.

It said overall, the crisis-related global jobs gap that had opened up since the beginning of the financial crisis in 2008, over and above an already large number of jobseekers, continues to widen.

According to the ILO report, in 2013 this gap reached 62 million jobs, including 32 million additional jobseekers, 23 million people that became discouraged and no longer look for jobs and 7 million economically inactive people that prefer not to participate in the labour market.

“If current trends continue, global unemployment is set to worsen further, albeit gradually, reaching more than 215 million jobseekers by 2018. “During this period, around 40 million net new jobs would be created every year, which is less than the 42.6 million people that are expected to enter the labour market every year.

“The global unemployment rate would remain broadly constant during the next five years, at half a percentage point higher than before the crisis,” the reporter said. The report said young people continued to be particularly affected by the weak and uneven recovery.

It said: “It is estimated that some 74.5 million young people – aged 15–24 – were unemployed in 2013; that is almost one million more than in the year before.

“The global youth unemployment rate has reached 13.1 per cent, which is almost three times as high as the adult unemployment rate. Indeed, the youth-to-adult unemployment ratio has reached a historical peak. It is particularly high in the Middle East and North Africa, as well as in parts of Latin America and the Caribbean and Southern Europe”.

The report said importantly, in the countries for which information exists, the proportion of young people neither in employment, nor in education or training (NEET) had continued the steep upward trend recorded since the start of the crisis.

It said in certain countries, almost one-quarter of young people aged 15 to 29 are now NEET. It said in 2013, 375 million workers (or 11.9 per cent of total employment) are estimated to live on less than $1.25 per day and 839 million workers (or 26.7 per cent of total employment) had to cope with $2 a day or less.

The report explained that this was a substantial reduction in comparison with the early 2000s when the corresponding numbers of working poor below $1.25 and $2 were more than 600 million and more than 1.1 billion, respectively.

It said in 2013, the number of workers in extreme poverty declined by only 2.7 per cent globally, one of the lowest rates of reduction over the past decade, with the exception of the immediate crisis year.

The report said informal employment remains widespread in most developing countries, although regional variations are sizeable. It also shows that a rebalancing of macroeconomic policies and increased labour incomes would significantly improve the employment outlook.

It said with 23 million people estimated to have dropped out of the labour market due to discouragement and rising long-term unemployment, active labour market policies need to be implemented more forcefully to address inactivity and skills mismatch.

The study offers the latest global and regional information and projections on several indicators of the labour market, including employment, unemployment, working poverty and vulnerable employment.