UN labour agency calls for work, social initiatives to offset global crisis

ILO Director-General Juan Somavia

28 January 2009 – To prevent a worst-case scenario of some 200 million workers pushed into extreme poverty, mostly in developing countries, the United Nations labour agency today called on Governments to prioritize productive investment, decent work and social protection in their responses to the global financial crisis.

“The Decent Work Agenda is an appropriate policy framework to confront the crisis,” said Juan Somavia, Director-General of the International Labour Office (ILO), upon the release of the agency’s annual Global Employment Trends (GET) report.

ILO’s prioritization of employment in economic planning in its Decent Work Agenda was key, Mr. Somavia said. “We find many elements of this Agenda in current measures to promote job creation, deepening and expanding social protection and more use of social dialogue,” he added.

He called on the G-20 group of large economies, in their upcoming 2 April meeting in London, to urgently agree on priority measures on employment and social protections for workers and to include labour considerations in their planning alongside financial issues.

“There is a powerful message that tripartite dialogue with employers and workers organizations should play a central role in addressing the economic crisis and in developing policy responses,” Mr. Somavia said.

Based on new developments in the labour market and depending on the timeliness and effectiveness of recovery efforts, the GET report says global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million – representing a 7.1 global rate – if the situation continues to deteriorate.

In that last scenario some 200 million workers, mostly in developing economies, could be pushed into extreme poverty, the report says.

The number of working poor – people who gain under two dollars per person per day – could rise to 1.4 billion, or 45 per cent of all the world’s employed, it warns.

“The ILO message is realistic, not alarmist. We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession,” Director-General Somavia said.

A number of policy measures recommended by ILO were being applied by many Governments, the report notes, including wider coverage of unemployment benefits and insurance schemes, re-training of redundant workers and pension protections.

Public investment in infrastructure, housing and green jobs and support to small and medium enterprises were among other ILO recommendations being applied, the report says.

An ILO press release on the report maintains that the effects of the downturn could be minimized if a large number of countries put in place such policies, and other worker-oriented initiatives, using their own accumulated reserves, emergency loans from the International Monetary Fund (IMF) and stronger aid mechanisms.

In a related development, the IMF today revised its global growth forecast steeply downward, to its lowest level since the Second World War, because financial markets remain under stress and are pulling down the rest of the economy.

The Fund now expects the global economy to come to a virtual standstill in 2009, growing by just one half of one per cent. In November, it had predicted growth of slightly more than two per cent.

According to its latest projections, advanced economies will experience sharp contractions, with declines of 1.5 per cent in the United States, two per cent in the Euro area, and 2.5 per cent in Japan.

Emerging and developing economies are expected to fare better, but will still see significant slowdowns in growth, the Fund says.

Only by restructuring the banking sector and unclogging credit markets will a sustained economic recovery be possible, the IMF maintains.


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