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Tuesday, February 21, 2012

ILO Global Employment Trends

This is a must read.  The International Labor Organization has published a report on Global Employment Trends 2012:  Preventing a Deeper Jobs Crisis.

So how are we doing?  Well, we are not out of the woods yet.  Not even close.  They think we are in stage two of a three stage crisis.  In stage one we had the shock and then the stimulus which softened the blow.  Now we are in stage two where high deficits and sovereign debt are leading to austerity measures.  A slow recovery is not helping matters.  If there is a second shock there will be second dip in growth and employment with very little money left in government coffers to lift us out.

In the worst case scenario there will be a negative shock in the eurozone (bad debt ) followed by the U.S. (slow growth and loan losses on mortgage portfolios) and perhaps emerging Asia (non-performing loans).   Largest impact would be in the EU and the U.S.  Latin America and Asia would be more resilient just as they were in the previous shock.

Before the crisis there were 171 million unemployed workers to which we can now add another 27 million.  And then there are the 40 million new workforce entrants per year (young people). That's just the jobs picture and doesn't even touch the other issue: a "decent work deficit," jobs that can keep food on the table and a roof over the head of a family. They estimate that we need to create 400 million new jobs over the next decade.  For those of you who would prefer not to read pdf's in bed late at night, here is a synopsis by Steven Kapsos, labour economist at the ILO that goes over the figures I've cited above:

ILO is predicting a recovery slowdown and flat employment which will drag down wages everywhere.  Less opportunity, low wages, and precarity will drive even more migration. They recommend four courses of action:
  • Global policy coordination
  • Regulation of the world financial system to loosen credit for SMEs which create 70 percent of jobs
  • Stimulus packages targeted to increasing employment
  • Incentives for the private sector to invest but....
  • Without putting fiscal stability at risk.

I'm not an economist nor a reader of tea leaves so I can't judge the merits of their recommendations or the accuracy of their predictions.  What is clear to me as I watch the ramp up to the 2012 elections in both the U.S. and France is that all this talk of contraception, immigration, flag-waving, saber-rattling and the merits of one civilization over another, is really nothing more then a bread and circus show.  If the world economy goes to hell yet again, all this will be pretty irrelevent. 


Just Me said...

Victoria, if you are interested in these things, I would recommend to you a recent "This American Life" story, called Continental Break up.

Great story telling, and good back ground information about Europe for an generally ignorant American.

Also, Planet Money does some good reporting too, although they are totally missing in action on the Diaspora Wars and FATCA/DATCA.

Victoria FERAUGE said...

That is a fabulous report, Marvin. Great reporting. Wonderful story. I remember the days of the conversion to the Euro. For IT people it was a godsend and it kept us employed. Everything had to be converted: payroll, billing, sales, financial systems. You name it, we did it.

And now here we are....

I wish Americans would start asking harder questions of their politicians. For me THE question is really what are you going to do about the potential Eurozone crisis? Instead people are wasting time and trees on things like building electric fences to keep our immigrants? Crazy....