Austerity plans cloud global jobs recovery: ILO

The UN labour agency said Friday that employment in many countries would only return to pre-crisis levels in 2015, two years later it previously forecast, as austerity programmes aggravate job losses.

Last Updated: Oct 01, 2010, 09:31 AM IST

Geneva: The UN labour agency said Friday
that employment in many countries would only return to
pre-crisis levels in 2015, two years later it previously
forecast, as austerity programmes aggravate job losses.

Despite "significant gains" with renewed economic
growth this year, "new clouds have emerged on the employment
horizon and the prospects have worsened significantly in many
countries," the agency said in its annual "World of Work
Report".

"Fairness must be the compass guiding us out of the
crisis," said International Labour Organisation Director
General Juan Somavia, as the ILO highlighted growing social
unrest over wages and working conditions.

The agency confirmed its forecast of a slight drop in
the global unemployment rate in 2010 to 6.5 percent, compared
to 6.6 percent last year.

It acknowledged that renewed economic growth had
brought "encouraging signs" of a recovery for jobs, especially
in Asia and Latin America.

However it warned that the jobs recovery in
industrialised economies would lag well behind emerging and
developing nations, where employment was forecast to return to
pre-crisis levels this year.

"In advanced economies employment is expected to return
to pre-crisis levels by 2015, instead of 2013 as expected in
last year`s World of Work Report," the report said.

The report`s lead author, Raymond Torres, blamed the
deterioration in the outlook on "changes in state policies
that have cast aside stimulus plans for austerity programmes".

"It`s a fundamental change that wasn`t expected," he said.

Despite their growth, emerging and developing
economies also face a challenge in creating eight million more
jobs to keep up with their growing workforce, the report said.

The ILO also highlighted a worrying increase in
long-term unemployment.

In 35 countries with such data, 40 per cent of job
seekers have been out of work for more than year, 10 per cent
more than in 2009.

Torres warned that such long-term joblessness could
cause significant psychological harm and prompt some people to
leave the labour market.

More than four million unemployed people worldwide
dropped out in 2009, according to the ILO.

Even in countries like Germany, where the recovery
prompted an unprecedented cut in unemployment, from 7.6 per
cent in August to 7.2 per cent in September, a "hard core" of
long term unemployed remained -- 45 per cent during the first
quarter, he said.

Bureau Report