Global Employment Trends: A Mixed Outlook for Many Markets
According to a report by the International Labour Organization (ILO), weak job recovery is likely to continue in 2011, especially in developed economies. Despite a sharp rebound in economic growth for many countries, official global unemployment stood at 205 million in 2010, essentially unchanged from 2009, and 27.6 million more than on the eve of the global economic crisis in 2007. The ILO projects a global unemployment rate of 6.1%, equivalent to 203.3 million unemployed, through 2011.
Fifty-five percent of the increase in global unemployment between 2007 and 2010 occurred in the developed economies and European Union (EU) region, while the region only accounts for 15% of the world’s labor force. However, in several economies in the developing world, such as Brazil, Kazakhstan, Sri Lanka, Thailand and Uruguay, unemployment rates have actually fallen below their pre-crisis levels.
Total global employment in industry declined in 2009, which is a major divergence from the historical annual growth rate of 3.4% over the period from 2002 to 2007. In the developed economies and EU region, employment in industry plummeted by 9.5 million between 2007 and 2009, while in the developing regions industrial employment grew, though at a much reduced pace.
In South-East Asia and the Pacific, unemployment rates did not increase on average during the crisis. In Latin America and the Caribbean, the rapid recovery has led to strong job growth. In Central and South-Eastern Europe and the CIS region, unemployment declined to 9.6%, having peaked in 2009 at 10.4%, the highest regional rate in the world.
Many economic leaders believe that entrepreneurship, investments in the real economy, inclusive labor markets and income-led growth are the means to get growth moving, while measures to expand social protection and improve the quality of jobs can ensure more sustainable outcomes.
Most economies have recently begun a careful tightrope walk from stimulus to fiscal consolidation. In your market, be wary of a narrow focus on reducing deficits without addressing the challenge of job creation, which may further weaken employment prospects and threaten the recovery.
In advanced economies, governments are being asked to put in place policies and incentives to stimulate private investment, while concurrently announcing credible plans to reduce budget deficits in the medium term. Policies are being considered to boost productivity in order to reduce unit labor costs and enhance competitiveness.
Developing countries that have been reliant on exports for growth are likely to strengthen domestic sources of demand. As developing economies have typically benefited from a faster rebound in growth through increases in exports, and today’s import markets are economically suspect, there is a sound basis for a reorientation of growth toward domestic consumption.
The overall outlook is far from overwhelmingly positive, but there are some glimmers of hope. A sustained employment recovery is beginning to gain momentum, and employment agencies will be at the forefront of that recovery.
