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Poetry and passion in the quest for sing... |
Rising global unemployment figures defy economic logic
The ILO argues the world jobless rate is neither politically nor socially sustainable, writes ROBERT TAYLOR
"Current levels of unemployment make no economic sense and are neither politically nor socially sustainable," says ILO director-general Michael Hansenne. "It is not just heartless but pernicious to assume nothing can be done to remedy unemployment, that so-called jobless growth (when a country's GDP grows with no substantial jobs growth) is the best that can be hoped for in an increasingly competitive economy or that current employment rates somehow constitute a natural and inevitable outcome of market forces." The report seeks to demolish a range of assumptions about world employment. "It is not true globalisation is an uncontrollable supranational force that has largely usurped national policy autonomy," it says. "The empirical evidence suggests trade with developing countries and the relocation of industries has been a minor explanatory factor behind the rise in unemployment and the declining wages of unskilled workers in industrialised countries." The report questions the popular view that the world is running out of jobs. "Much of the 'end-of-work' literature rests on unwarranted extrapolation from dramatic episodes of corporate downsizing, ignoring job creation elsewhere." The ILO says the employment growth rate has remained "almost unchanged over the past three-and-a-half decades and has not slowed down significantly since 1973". Nor does the ILO accept job changes are becoming more frequent and employment more unstable, saying there has been an increase, not a decline, in the length of job tenure. "On average, individuals currently employed have been in their jobs for six to 12 years, depending on the country, and this figure has not been declining," it says. "Only in Spain have job moves become increasingly frequent, probably because of institutional changes". The report doubts whether "labour market imperfections" are "either the main or the sole cause of the upward drift in European unemployment", although it does not suggest that they have had no effect. It says the "underlying" cause of increased unemployment is the slowdown in economic growth since 1974. It criticises the rise in wage inequality, particularly in the US, UK and New Zealand, which it says is partly due to the fall in trade union density and decentralisation of pay talks.
The ILO calls for a return to co-ordinated pay bargaining, the creation of social pacts between unions and employers, as well as the encouragement of profit sharing or "some form of tax-based incomes policy if there are no better alter natives". It wants more efficient labour market policies with subsidies for low-wage employment, training focused on the most disadvantaged, incentives for recruiting long-term jobless and improved benefit transfer programmes linking benefits and work more closely. The report says developing countries should also be committed to full employment and it argues this can be achieved by creating more open and competitive economies that benefit fully from expanding trade and investment flows in the global economy. - Financial Times
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