Global Employment Trends 2012: World faces a 600 million jobs challenge, warns ILO

24 January 2012.GENEVA (ILO News). The world faces the “urgent challenge” of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report on global employment by the International Labour Organization (ILO).

“After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million,” says the ILO in its annual report titled “Global Employment Trends 2012: Preventing a deeper jobs crisis”. Moreover, the report says more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year.

The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the US$ 2 a day poverty line, mostly in developing countries.

“Despite strenuous government efforts, the jobs crisis continues unabated, with one in three workers worldwide – or an estimated 1.1 billion people – either unemployed or living in poverty”, said ILO Director-General Juan Somavia. “What is needed is that job creation in the real economy must become our number one priority”.

The report says the recovery that started in 2009 has been short-lived and that there are still 27 million more unemployed workers than at the start of the crisis. The fact that economies are not generating enough employment is reflected in the employment-to-population ratio (the proportion of the working-age population in employment), which suffered the largest decline on record between 2007 (61.2 per cent) and 2010 (60.2 per cent).

At the same time, there are nearly 29 million fewer people in the labour force now than would be expected based on pre-crisis trends. If these discouraged workers1 were counted as unemployed, then global unemployment would swell from the current 197 million to 225 million, and the unemployment rate would rise from 6 per cent to 6.9 per cent.

The report paints three scenarios for the employment situation in the future. The baseline projection shows an additional 3 million unemployed for 2012, rising to 206 million by 2016. If global growth rates fall below 2 per cent, then unemployment would rise to 204 million in 2012. In a more benign scenario, assuming a quick resolution of the euro debt crisis, global unemployment would be around 1 million lower in 2012.

Young people continue to be among the hardest hit by the jobs crisis. Judging by the present course, the report says, there is little hope for a substantial improvement in their near-term employment prospects.

Global Employment Trends 2012 says 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than 4 million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.

The report’s main findings also include:

• There has been a marked slowdown in the rate of progress in reducing the number of working poor. Nearly 30 per cent of all workers in the world – more than 900 million – were living with their families below the US$2 poverty line in 2011, or about 55 million more than expected on the basis of pre-crisis trends. Of these 900 million working poor, about half were living below the US$1.25 extreme poverty line.
• The number of workers in vulnerable employment2 globally in 2011 is estimated at 1.52 billion, an increase of 136 million since 2000 and of nearly 23 million since 2009.
• Among women, 50.5 per cent are in vulnerable employment, a rate that exceeds the corresponding share for men (48.2).
• Favourable economic conditions pushed job creation rates above labour force growth, thereby supporting domestic demand, in particular in larger emerging economies in Latin America and East Asia.
• The labour productivity gap between the developed and the developing world – an important indicator measuring the convergence of income levels across countries – has narrowed over the past two decades, but remains substantial: Output per worker in the Developed Economies and European Union region was US$ 72,900 in 2011 versus an average of US$ 13,600 in developing regions.

“These latest figures reflect the increasing inequality and continuous exclusion that millions of workers and their families are facing”, said Mr. Somavia. “Whether we recover or not from this crisis will depend on how effective government policies ultimately are. And policies will only be effective as long as they have a positive impact on peoples’ lives”.

The report calls for targeted measures to support job growth in the real economy, and warns that additional public support measures alone will not be enough to foster a sustainable recovery.

“Policy-makers must act decisively and in a coordinated fashion to reduce the fear and uncertainty that is hindering private investment so that the private sector can restart the main engine of global job creation”, says the report.

It also warns that in times of faltering demand further stimulus is important and this can be done in a way that does not put the sustainability of public finances at risk. The report calls for fiscal consolidation efforts to be carried out in a socially responsible manner, with growth and employment prospects as guiding principles.

1. Executive summary
2. English Español Français 
3. Full report
4. Chapter 1- The macroeconomic outlook is deteriorating
5. Chapter 2- Global labour market situation
6. Chapter 3- Regional labour market and economic developments
7. Chapter 4- Policy options for growth with jobs
8. Appendices

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More and better jobs in South Asia

This book is divided into seven chapters. Chapter one is an overview. Chapter two reviews South Asia's recent track record with regard to the quantity and quality of job creation. It traces the relationship of such job creation mostly to overall economic growth and attempts to answer what needs to be done to meet South Asia's employment challenge.

Chapter three discusses the key features of labor markets in South Asia, including where the better jobs are, who holds them, and the implications for the employment challenge ahead. Chapter four reviews the business environment constraints affecting, in particular, those firms that have expanded employment and discusses policy options for overcoming the most binding business constraints in South Asia. 

Chapter five analyzes the dimensions of the education and a skill challenge in the region and discusses policy priorities for improving the quality and skills of graduates of education and training systems. Chapter six reviews the role of labor market policies and institutions in encouraging job creation and protecting workers in the formal and informal economy and discusses possible directions for labor market policies, including options to increase the access of informal sector workers to programs that help them manage labor market shocks and improve their future earnings potential. Finally, chapter seven reviews the key constraints to job creation and the policy priorities for creating more and better jobs in conflict-affected areas.

This book investigates how more and better jobs can be created in South Asia.1 It does so for two reasons. First, this region will contribute nearly 40 percent of the growth in the world’s working-age (15–64) population over the next several decades. It is important to determine what needs to be done to absorb them into employment at rising levels of labor productivity.

Second, creating more productive jobs—with jobs defi ned to include all wage work and selfemployment—is the most reliable route out of poverty for a region that is home to more than 40 percent of the world’s absolute poor. The book addresses three major questions.

• Has South Asia been creating an increasing number of jobs and better jobs?

• What determines the quality of job creation, and what is the employment challenge going forward?

• What demand- and supply-side bottlenecks need to be eased to meet South Asia’s employment challenge in the face of intensifying demographic pressure?

World Bank. Author:Nayar, Reema ; Gottret, Pablo ; Mitra, Pradeep ; Betcherman, Gordon ; Lee, Yue Man ; Santos, Indhira ; Dahal, Mahesh ; Shrestha, Maheshwor. Document Date: 2012/01/01.Document Type: Publication. Report Number: 66229

More and better jobs in South Asia

For information about Projects in South Asia Projects

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Employment:mental health issues rising in workplace, says OECD

12/12/2011.Mental illness is a growing problem in society and is increasingly affecting productivity and well-being in the workplace, according to a new OECD report. Sick on the Job? Myths and Realities about Mental Health at Work says that one in five workers suffer from a mental illness, such as depression or anxiety, and many are struggling to cope.

Three in four workers with a mental disorder report reduced productivity at work, compared to one in four workers without a mental disorder. Work absences are also much more frequent for workers with mental illness, and about 30% to 50% of all new disability benefit claims in OECD countries are now attributed to mental ill health.

The report challenges some of the myths around mental health and concludes that policymakers need to look for new solutions. Most people with a mental disorder work, with employment rates of between 55% to 70%, about 10 to 15 percentage points lower than for people without a disorder.

But people with a mental disorder are two to three times as likely to be unemployed as people with no disorders. This gap represents a major loss to the economy, as well as for the individuals and their families.

Increasing job insecurity and pressure in today’s workplaces could drive a rise in mental health problems in the years ahead, says the OECD. The share of workers exposed to work-related stress, or job strain, has increased in the past decade all across the OECD. And in the current economic climate, more and more people are worried about their job security.

Action and early intervention is key as half of all mental disorders start in adolescence. Young people in many countries increasingly enter the disability benefit system without having spent much time in the workforce. This means that the population claiming disability benefits is getting younger in most countries. Once dependent on such benefit, it becomes difficult to relinquish it.

To help sufferers, a new approach is needed, especially in the workplace, says the OECD. This includes good working conditions which reduce and better manage stress; systematic monitoring of sick leave behaviour; and help to employers to reduce workplace conflicts and avoid unnecessary dismissal caused by mental health problems.

Most common mental disorders can get better, and the employment chances be improved, with adequate treatment. But health systems in most countries are narrowly focused on treating people with severe disorders, such as schizophrenia, who make up only one-fourth of sufferers. Taking more common disorders more seriously would boost the chances for people to stay in, or return to, work. Today, almost 50% of those with a severe mental disorder and over 70% of those with a moderate mental disorder do not receive any treatment for their illness.

Chapter 6 'Summary and Conclusions' (free PDF)

Fact Sheet (English / French)  and data from four figures

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More information about Sick on the Job at www.oecd.org/els/disability

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Committee Approves More Bills To Remove Regulatory Impediments to Job Creation

Press Releases.Washington, Nov 30. Financial Services Committee continued its efforts to promote job creation by easing the burden government regulations impose on the private sector with the approval today of three bills that fix derivatives provisions of the Dodd-Frank Act.

Since January, the Committee has led efforts to identify and fix job-killing provisions in the Dodd-Frank Act, as well as remove regulatory barriers standing in the way of an economic recovery. As the nation’s economy continues to struggle, the Committee has offered proposals to help the private sector grow and create jobs. To date, the Committee has approved 18 bills designed to encourage job creation and economic growth.

Chairman Spencer Bachus said, “The three derivatives bills approved today will bring much needed certainty to the over-the-counter derivatives market. They will help ensure that the U.S. is not placed at a competitive disadvantage with the rest of the world; that markets develop based on the needs of the participants and not on what Washington bureaucrats think a market should resemble; and that end-users are able to efficiently hedge their risks."

Capital Markets and Government Sponsored Enterprises Subcommittee Chairman Scott Garrett said, “With our economy on life support and the national unemployment rate at 9%, we need all hands on deck in Congress to bring much-needed relief to out of work Americans. I’m pleased that the Financial Services Committee answered the call today by approving several common-sense proposals that will help alleviate and clarify over-reaching regulations while breathing life into our economy and spurring main street job creation.”

In addition to the three bills dealing with derivatives provisions of the Dodd-Frank Act, the Committee also approved H.R. 3512, which revises the Abraham Lincoln Commemorative Coin Act to allow distribution of the surcharges collected on the sales of the coin.

The Full Committee approved the following bills to fix the derivatives provisions of the Dodd-Frank Act:H.R. 2586, the Swap Execution Facility Clarification Act:H.R. 2586 directs the CFTC and SEC to promulgate rules for swap execution facilities and security-based swap execution facilities (SEFs) to effectuate Congressional intent that SEFs can serve as an alternative to exchanges and provide an execution facility for illiquid or thinly-traded swaps. The legislation was approved by a voice vote.

H.R. 2586 ensures SEFs can serve as a platform for executing swaps and security-based swaps by:

• requiring immediate execution of matched trades;
• allowing market participants to receive and respond to a single quote;
• removing regulatory obstacles that require SEFs to have a minimum number of participants receiving bids or offers; and
• Ensuring that trading platforms executing swap transactions include voice-based and hybrid trading models.
• Does not allow the government to dictate market structure.

H.R. 2586 was introduced by Capital Markets Subcommittee Chairman Garrett and Rep. Robert Hurt. H.R. 2682, The Business Risk Mitigation and Price Stabilization Act The Business Risk Mitigation and Price Stabilization Act provides clarity to the derivatives title of the Dodd-Frank Act by reconfirming the end-user exemption from margin and capital requirements. End-users are firms and companies that use derivatives to manage their risks, not to speculate. H.R. 2682 was approved by a voice vote.

Through colloquies during the debate on Dodd-Frank and plain-language statute, legislators made their intent clear that the derivatives title was not meant to impose margin requirement on end users. Yet, regulators have interpreted the derivatives title to give them authority to impose margin requirements on end-users.

H.R. 2682 was introduced by Reps. Michael Grimm, Gary Peters, Austin Scott, and William Owens.H.R. 2779, introduced by Rep. Steve Stivers.H.R. 2779 provides an important clarification to the Dodd-Frank Act derivatives title, which treats inter-affiliate swaps the same as swaps between unrelated counterparties. Without correction, companies may face double the costs associated with hedging legitimate business risks. The legislation was approved unanimously by a vote of 53 to 0.

H.R. 2779 ensures entities under a common corporate ownership are able to appropriately manage risks without unnecessary costs. Under the legislation, inter-affiliate swaps will be exempt from the margin, clearing and reporting requirements of the Dodd-Frank Act.

H.R. 2779 was introduced by Reps. Steve Stivers and Marcia Fudge.                s

Subcommittee Hearing Focuses on Ensuring Regulatory Approaches to Hydraulic Fracturing that Will Help Protect U.S. Jobs

November 16, 2011. Washington, DC – The Subcommittee on Water Resources and Environment, chaired by U.S. Rep. Bob Gibbs (R-OH), held a hearing this morning to explore potential new regulations by the Environmental Protection Agency (EPA) on the hydraulic fracturing of shale beds.

EPA has found that natural gas production from shale formations has grown as a result of advances in drilling technologies and greater use of the technique of hydraulic fracturing. It has developed from a negligible amount just a few years ago to almost 15% of total U.S. natural gas production and is expected to triple in the coming decades. The newly extractable shale gas resources have changed the U.S. natural gas position from net importer to potentially a net exporter.

Hydraulic fracturing has become a widely used technique for extracting natural gas from reservoirs such as tight sands, coal beds, and deep shales. The process creates small cracks in horizontal underground rock formations of up to two miles below ground level to extract gas from shale. One of the main challenges involved with hydraulic fracturing is the management of the wastewater that is produced during the process. EPA has recently announced that they plan to look into implementing additional regulations of this wastewater under the Clean Water Act, and the main focus of this morning’s hearing was ensuring that these potential regulations are reasonable and do not hamper the enormous economic benefits of natural gas production.

“In numerous areas around our nation where shale gas formations are found, there has been an economic boom resulting from gas exploration and production,” said Chairman Gibbs. “Not only is America getting a relatively cheap and less polluting source of energy, but the activity is generating thousands of direct jobs in the drilling, extracting, and refinement processes.

“In Pennsylvania alone, employment is projected to expand by over 180,000 jobs during 2012 in the Marcellus Shale region of the state,” Gibbs continued. “And in my state of Ohio, activities associated with energy production from the Utica Shale will be responsible for generating more than 204,000 jobs and $12 billion in wages by 2015. In addition to the clear economic benefits of energy production through fracking, there is a national security benefit as well. Making greater use of domestic sources of energy reduces our dependence on foreign energy sources that are often unstable and unfriendly.”

Gibbs also spoke to the satisfactory job states are doing currently to regulate hydraulic fracturing, saying, “Even though no comprehensive set of Federal standards exists at this time for the disposal of wastewater discharged from natural gas extraction activities, states have been picking up the slack to make sure such activities are conducted safely. Moreover, the states are constantly improving their efforts to make sure that the extraction of these important energy resources are done in a safe and environmentally protective manner. I am concerned that, given the recent history of new EPA regulations, these new effluent guidelines will be so needlessly restrictive that the gas extraction operations in Ohio and many other states, and the resulting economic benefits they provide to the states, will suffer.”

Thomas Stewart, Executive Vice President of the Ohio Oil & Gas Association (OOGA) echoed Chairman Gibbs’ point on the economic benefits of the natural gas industry, saying, “The new and efficient development of natural gas from the resources shale plays is providing the American consumer an incredible energy bargain providing a fuel priced at 22 percent of its intrinsic energy value, a trend that the marketplace indicates will continue into the future. It is also enticing the chemical industry to reenter the United States and build new chemical manufacturing facilities because they will have access to a super-competitive and plentiful feedstock, jump starting the job growth potential downstream of the wellhead.”

Michael Krancer, Secretary of the Pennsylvania Department of Environmental Protection, also testified: “Our ability to unlock the huge clean burning energy source contained in unconventional shale formations will transform Pennsylvania into an energy exporter and move our nation toward energy independence. In addition, we are looking at an economic and energy transformation. We have already seen tens of thousands of new jobs here in Pennsylvania from the industry itself as well as from new industries spawned to support it. These are good paying career jobs in many fields. And that is just the start. There will be hundreds of thousands more good paying skilled and unskilled jobs in a variety of sectors.”

Krancer continued, “Simply put, because of our long history of oil and gas development and comprehensive regulatory structure, Pennsylvania does not need federal intervention to ensure an appropriate balance between resources development and environmental protection is struck…Pennsylvania is already showing that the balance of environmental protection and the development of this world class resources is being accomplished.”

Dana Murphy, Chair of the Oklahoma Corporation Commission, said, “The oil and gas industry’s annual operations in Oklahoma generate $51.7 billion in goods and services, nearly one-third of Oklahoma’s gross state product. The industry directly employs more than 65,000 Oklahomans, and its activity means many more jobs in other sectors of the state’s economy as well. One in seven jobs in Oklahoma is directly or indirectly supported by the oil and gas industry.”

Murphy continued, “We have protected our underground water supplies and continue to guard our surface water. We have protected existing jobs and in a time of economic doldrums, we have actually promoted new jobs…One of the best steps the federal government and agencies can take is to support and encourage the states and the working relationships among the states in ensuring the best regulatory practices are put in place for various states.”

Members of the Subcommittee, the state representatives, and industry professionals agreed that EPA must not over regulate the hydraulic fracturing process, hindering millions of jobs in the process. More information on this morning’s hearing, including witness testimony, can be found here.

Senate Legislation Protects Small Business from Job-Crushing Health Insurance Tax

WASHINGTON, D.C., November 16, 2011 — United States Senators John Barrasso (R-WY), Orrin Hatch (R-UT), and Olympia Snowe (R-ME) today introduced legislation, The Jobs and Premium Protection Act, to repeal the onerous Health Insurance Tax (HIT) which takes $87 billion away from small business by the end of the decade, resulting in a job-loss of 125,000 to 249,000 jobs in the private sector in 2021, according to a study released by the National Federation of Independent Business Research Foundation; small business will shoulder 59 percent of this job-loss burden.

“The Health Insurance Tax is a Washington policy that will have a devastating impact on our nation’s job creators,” said Susan Eckerly, Senior Vice President of Public Policy. “The stark reality is that the country’s economy is still reeling, and every single job matters; the last thing people in the unemployment line want to hear is that one less job will be created and even more will be shed as a result of the HIT. Because of the leadership of Senators Barrasso, Hatch and Snowe, small-business owners now have bipartisan and bicameral legislation that will repeal this tax and protect their ability to continue to create vital jobs.”

“Our legislation repeals this unfair, hidden tax on America’s job creators, and will save thousands of jobs across the country,” said United States Senator John Barrasso. “This tax is just another example of how the President’s trillion dollar health spending law is only making things worse for small businesses and their workers. With 9 percent unemployment, hardworking Americans cannot afford to be hit hard by even higher premiums. We need to stop the HIT on our economy now – before it starts.”

“Chock full of tax hikes, mandates and government overreach, the President’s $2.6 trillion health spending law is an anchor around our economy’s neck,” said United States Senator Orrin Hatch. “The health law’s insurance tax is especially damaging, undercutting our economic recovery by increasing the cost of health coverage. Money that could go to higher wages, new workers, or investment will instead go to pay this new tax. With insurance premiums already skyrocketing and unemployment hovering at 9 percent, this tax makes no sense. The President is demanding jobs legislation; he should start by supporting the repeal of this tax.”

“Preventing the new health insurance tax is critical, especially in the current economic environment,” said United States Senator Olympia J. Snowe. “As the cost of health insurance continues to rise unabated – another 9 percent on average this year – individuals and small businesses are struggling to afford coverage. Meanwhile, the Democrats’ health care law is set to impose this $60 billion tax and the Director of the Congressional Budget Office has confirmed this tax will be paid by the individuals and small businesses who buy health insurance. This tax could increase the cost of health insurance by 15 percent for small businesses, and kill hundreds of thousands of jobs. I am proud to be a sponsor of the Jobs and Premium Protection Act, and remain committed to repealing the job-killing health care law, as well as to repealing its worst pieces.”

The Health Insurance Tax, which goes into effect in 2014, will cost small-business owners, their employees and the self-employed, $87 billion in the first ten years and $208 billion in the following ten years; the tax impacts 2 million small businesses, 12 million employees and the self-employed who purchase in the individual market and 26 million employees who are covered by their employer, resulting in a cost of nearly $5,000 per family over a decade.

The NFIB Research Foundation’s BSIM (Business Size Impact Module) model suggests that such a price increase will reduce private sector employment by 125,000 to 249,000 jobs in 2021, with 59 percent of those losses falling on small business. The BSIM is a dynamic, multi-region forecasting model that analyzes the impact of policy “shocks” on the economy. The BSIM is unique in ability among models to forecast the economic impact of policy on U.S. businesses differentiated by the size of the firm; in this case, small business is defined as those firms with less than 500 employees (Small Business Association definition).

Representative Charles Boustany (R-LA) has introduced legislation in the House, HR 1370, to repeal the Health Insurance Tax and his legislation currently has 78 bipartisan cosponsors, leading the way for a bicameral and bipartisan repeal of the Health Insurance Tax.

Senators Barrasso, Hatch, Snowe Introduce Bill to Repeal HIT
Contact: Jennifer Cooper, (202) 406-4425 or Jennifer.Cooper@NFIB.org

Job growth and finance: are some financial institutions better suited to early stages of development than others?

This paper combines firm-level data from 89 countries with updated country-level data on financial structure, and uses two estimation approaches. It finds that in low-income countries, labor growth is swifter in countries with a higher level of private credit/gross domestic product; the positive effect of bank credit is especially pronounced in industries that depend heavily on external finance; and banking development is positively associated with more physical and human capital investment.

These findings are consistent with predictions from new structural economics. In high-income countries, labor growth rates are increasing in the level of stock market capitalization, which is also consistent with predictions from new structural economics, although the analysis is unable to provide evidence that the association is causal. It finds no evidence that small-scale firms in low-income countries benefit most from private credit market development.

Rather, the labor growth rates of larger, capital-intensive firms increase more with the level of private credit market development, a finding consistent with the history-based political economy view that banking systems in low-income countries serve the interests of the elite, rather than providing broad-based access to financial services

Author:Cull,Robert;Xu,L.Colin. Document Date: 2011/11/01.Document Type:  Policy Research Working Paper. Report Number: WPS5880.Volume No:  1 of 1

Job growth and finance: are some financial institutions better suited to early stages of development than others?