The U.N. job watchdog also spotlights the problem of youth unemployment, noting that there are 73.8 m young people unemployed worldwide.
More than 197 million people worldwide are jobless, and an additional 39 million have simply given up looking for work, a U.N. agency said on Monday, warning that government budget-balancing was hurting employment and would probably lead to more job losses soon.
With global growth stalling five years after the financial crisis upended much of the world economy, the number of jobless is expected to rise by 5.1 million this year, to more than 202 million, the International Labor Organization said in a special report. And it predicted there would be a further three million newly jobless people next year.
High unemployment rates in the developed world — 7.8 per cent in the United States, 11.8 per cent in the eurozone — weigh on demand and hold back economic growth. Global gross domestic product will probably expand about 3.6 per cent this year, the International Monetary Fund said in October, below its previous forecast.
The ILO's revised figures mean global unemployment has risen by 28 million since 2007, before the start of the financial crisis, said ILO Director-General Guy Ryder, at a press conference on Monday.
The ILO found that macroeconomic imbalances “have been passed on to the labour market to a significant degree.’’ With aggregate demand weakening, employment “has been further hit by fiscal austerity programmes in a number of countries, which often involved direct cutbacks in employment and wages, directly impacting labour markets.’’
More troubling, it said, was that while governments had sought to counter the effects of the financial crisis with fiscal stimulus, the later austerity measures in some countries appeared to be reinforcing the downturn.
The effects of the recession in Europe are being felt elsewhere through “a spillover effect,’’ the ILO found, mostly through the mechanism of reduced demand for goods from elsewhere, but also in the form of volatile capital inflows in places such as Latin America and the Caribbean. These forces have pushed up local foreign exchange rates and left policymakers with difficult choices about how to keep soaring currencies in check without strangling economic growth.
The agency said that it was common for the rate of job creation to be slow by historical standards after a financial crisis, but that there had been “a short-lived respite’’ for developed countries beginning in 2010. That period has now ended, and once again “further job restructuring is likely before a stronger rebound can be expected in labour markets.’’
More people were simply leaving the job market altogether, particularly in the developed world, with labour force participation rates falling ‘dramatically,’ it said, “masking the true extent of the jobs crisis.’’
The ratio of employment-to-population ratio has fallen as much as 4 percentage points or more in some areas, it noted, and even where jobless rates have eased, the participation rate ‘has not yet recovered.’
The ILO also spotlighted the problem of youth unemployment, noting that there were 73.8 million young people unemployed worldwide. It estimated that an additional half million would join the ranks of the jobless this year. The youth unemployment rate, currently at 12.6 percent, will probably rise to 12.9 per cent by 2017, the agency said.
“The crisis has dramatically diminished the labour market prospects for young people,’’ the agency said, “as many experience long-term unemployment right from the start of their labour market entry, a situation that was never observed during earlier cyclical downturns.’’
The agency said employment tapered off in 2011 before turning negative in 2012, with another four million people added to global unemployment rolls last year, about one-fourth of whom were in advanced economies where austerity measures had been the most pronounced.
But even countries in which jobless rates have not risen “often have experienced a worsening in job quality,’’ the ILO said, “as vulnerable employment and the number of workers living below or very near the poverty line increased.’’ — New York Times News Service