By Nick Mann | 22 January 2013
The total number of unemployed people worldwide increased by 4.2 million to 197 million last year and will top 200 million by the end of 2013, according to a report published by the International Labour Organisation yesterday.
In its annual Global employment trends, the United Nations’ labour agency said decelerating global economic growth and policy makers’ incoherent response had combined to discourage new investment and job creation.
The situation is particularly bad for young people, it said, with almost 74 million people in the 15–24 age group unemployed worldwide – equivalent to a 12.4% unemployment rate.
In advanced economies, 35% of jobless young people had been out of work for six months or more, affecting their long-term career prospects and pushing some out of the jobs market altogether, the report warned.
ILO director-general Guy Ryder said: ‘An uncertain economic outlook, and the inadequacy of policy to counter this, has weakened aggregate demand, holding back investment and hiring.
‘This has prolonged the labour market slump in many countries, lowering job creation and increasing unemployment duration even in some countries that previously had low unemployment and dynamic labour markets.’
Despite expectations for moderate global economic growth in 2013/14, the ILO expects the number of unemployed people worldwide to rise by 5.1 million this year and then by another 3 million in 2014. The unemployment rate is forecast to remain around 6% until 2017.
Another half million young people will be pushed out of work by 2014, increasing the jobless rate for the under-24s to 12.9% by 2017, it added.
To avoid the risk of the jobs crisis becoming ‘entrenched’, the ILO called on countries to provide more ‘coherent and predictable’ policy plans. In particular, they should implement financial reforms that allow the banking sector to support investment and provide credit for small and medium-sized enterprises – the ‘key engines’ of job creation.
Austerity measures in several European countries had added to lower wages, weaker consumption and faltering global demand, the report said, and as a result countries needed to consider easing off their fiscal adjustment.
‘In light of the global jobs and consumption deficit, countries should adapt the pace of their fiscal consolidation to the underlying strength of the economy and recognise that short-term stimulus may be needed to grow out of debt burdens,’ it explained.
A co-ordinated response by international policy makers was needed, involving injections of public investment into job-creating initiatives where private money was short, retraining and re-skilling programmes and focusing on youth unemployment.
Ryder added: ‘The high uncertainty, which is holding off investments and job creation, will not recede if countries come up with conflicting solutions. The costs of inactivity, of allowing long-term unemployment to grow and young people to disconnect further from society, would be far higher.’
