Unemployment and underemployment lies at the core of poverty. For the poor, labour is often the only asset they can use to improve their well-being. Hence the creation of productive employment opportunities is essential for achieving poverty reduction and sustainable economic and social development. It is crucial to provide decent jobs that both secure income and empowerment for the poor, especially women and younger people.
Rapid economic growth can potentially bring a high rate of expansion of productive and remunerative employment, which can lead to a reduction in poverty. Nevertheless, the contribution of the growth process to poverty reduction does not depend only on the rate of economic growth, but also on the ability of the poor to respond to the increasing demand for labour in the more productive categories of employment.
Given the importance of employment for poverty reduction, job-creation should occupy a central place in national poverty reduction strategies. Many employment strategies are often related to agricultural and rural development and include using labour-intensive agricultural technologies; developing small and medium-size enterprises, and promoting micro projects in rural areas. Many strategies promote self-employment, non-farm employment in rural areas, targeted employment interventions, microfinance and credit as means of employment generation, skill formation and training.
Such strategies, however, often address the quantity of employment while the qualitative dimensions, such as equity, security, dignity and freedom are often absent or minimal. In general, national poverty reduction strategies including Poverty Reduction Strategies do not comment on employment programmes, social protection or rights at work. Neither do they offer in-depth analysis of the effects of policies on poverty reduction.
A social perspective on development emphasizes the view that the best route to socio-economic development, poverty eradication and personal wellbeing is through decent work. Productive employment opportunities will contribute substantially to achieving the internationally agreed development goals, especially the Millennium Development Goal of halving extreme poverty by 2015.
There should be a focus on creating better and more productive jobs, particularly those that can absorb the high concentrations of working poor. Among the necessary elements for creating such jobs are investing in labour-intensive industries, especially agriculture, encouraging a shift in the structure of employment to higher productivity occupations and sectors, and upgrading job quality in the informal economy. In addition, there should also be a focus on providing poor people with the necessary skills and assets that will enable them to take full advantage of any expansion in employment potential.
Report of the Secretary General: The centrality of employment to poverty eradication
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2007 Report on the World Social Situation “The Employment Imperative”