global employment trends 2014

Global Employment Trends 2014Risk of a jobless recovery?

Employment Trends UnitInternational Labour OrganizationGeneva, Switzerland

• Macroeconomic outlook

• Global labour market trends

• Regional economic and labour market prospects

• Risk of a jobless recovery?: Policy directions

2

Overview

Global Employment Trends

• Economic recovery is underway and strengthens in 2014

Key facts:• Some recovery in advanced economies• GDP figures still below pre crisis figures which is reflected in high unemployment levels• Employment growth continues to lag behind• Decent job creation slowed down almost everywhere

Macroeconomic outlook 3

Macroeconomic outlookRecovery in growth but not in jobs

4

• Elevated hiring uncertainty continues to weigh on labour markets (e.g. US)

• One of the factors weighing on labour markets is hiring uncertainty:• It increased with the crisis in 2007• Weak aggregate demand and uncertainty of the future recovery firms wait for hiring• Lack of policy coordination elevated the level of uncertainty harmful for employment

Macroeconomic outlook

Macroeconomic outlookEconomic uncertainty remains high, with negative effects on hiring

5Macroeconomic outlook

Macroeconomic outlookAre house price cycles responsible for the slow job recovery?

House prices above

historical averages

Both in comparison to rents

and disposable

income

Can explain unemployme

nt persistence

in some countries

6Macroeconomic outlook

This shows the impact of : 1. Share prices2. Housing prices3. Combination of both

On the average of unemployment

Impact of a simulation shock on the unemployment rate in advanced economies

Macroeconomic outlookAre house price cycles responsible for the slow job recovery?

7Global labour market trends

Global labour market trendsUnemployment increases further in 2014

Global jobs gapGlobal & regional unemployment

Informal employment

Vulnerable employment

Poverty reductionSkills mismatch

Long-term unemployment

Youth unemployment

Mainconcerns

Global labour market trends 8

Global labour market trendsGlobal unemployment trends and projections, 2003-18

• Global unemployment has reached almost 202 million people in 2013• The global unemployment rate is expected to remain at 6.1 per cent between 2014 and

2017


Global labour market trendsThe crisis- related global jobs gap widens further

• Crisis-related jobs gap widened to 62 million jobs lost since 2008• This includes 23 million people who became discouraged and dropped out of the labour

market


Global labour market trendsChange in the youth unemployment rate

• Youth unemployment continued rising in 2013• Strong increases in some emerging regions such as the Middle East

Global Employment Trends 11

Global labour market trendsJobless growth or slow recovery?

• In G7 countries, the recovery has been similarly strong in comparison with previous recessions

• But employment continued to contract even after the recovery had set in


Global labour market trendsThe global wage employment gap (millions)

• Wage employment growth only expanded by 28.1 million in 2013• This was a sharp deceleration from the annual growth of more than 35 million over the

previous two years.• By 2018, almost 61 million wage-earning jobs will be missing due to the crisis


Global labour market trendsHigh rates of informality hamper sustainable progress in poverty reduction

• Large regional differences in the incidence of informal employment• Asian economies suffer the most, with informality rates of up to 90 per cent


Global labour market trendsStructural change in emerging economies

• Catch-up potential still large in many emerging economies• But some countries have shown little signs of improvements in per-capita income as the

employment share of industry has stagnated

Regional economic and labour market prospects 15

Regional economic and labour market prospectsDeveloped Economies and European Union

• The regional employment-to-population ratio shows only moderate signs of improvement



• In crisis economies in the region, young people have been particularly hard hit• The job loss has also been strong for young adults (24-34 years) who already have some

labour market experience (e.g. Spain)



• Long term employment is on the rise as skills mismatch increases• As a consequence, unemployment duration has doubled in many countries in the region

18

Regional economic and labour market prospectsCentral and South-Eastern Europe

Regional economic and labour market prospects

• Regional unemployment has increased moderately in 2013• Little improvement expected, but only over the medium-term


Regional economic and labour market prospectsCentral and South-Eastern Europe

• Vulnerable employment decreased only moderately in 2013• The crisis-related increase in vulnerable employment has still not been fully absorbed

20Regional economic and labour market prospects

Regional economic and labour market prospectsLatin America and the Caribean• The regional labour market has shown strong potential over recent years• The region added the fewest number of jobseekers to global unemployment in 2013


Regional economic and labour market prospectsLatin America and the Caribean

• Labour productivity remains below the world average...• ...and projected growth does not indicate potential for catch up


Regional economic and labour market prospectsEast Asia

• Sharp increase in unemployment expected in the region from earlier low levels...• ...as the economies in the region become more mature


• Most countries in the region have increase the skill-content of their manufacturing sector

• This poses challenges for firms in the region to find qualified labour

Regional economic and labour market prospectsEast Asia


Regional economic and labour market prospectsSouth East Asia and the Pacific

• Moderate increase in the regional unemployment rate


• Skills mismatch is high in some countries in the region (e.g. Vietnam)• Young graduates suffer especially from lacking job opportunities

Regional economic and labour market prospectsSouth East Asia and the Pacific


Regional economic and labour market prospectsSouth Asia

• Regional unemployment rate is on the rise and projected to increase further


• Gender disparities in participation rates remain large in most countries of the region

Regional economic and labour market prospectsSouth Asia


• Unemployment rates among the highest in the world

Regional economic and labour market prospectsMiddle East and North Africa


Regional economic and labour market prospectsMiddle East and North Africa

• Closing the large jobs gap would substantially raise GDP per capita in MENA countries

1. First scenario: Keep youth unemployment constant until 2018

2. Second scenario: Reduce youth unemployment rate by half in comparison to 2013

3. Third scenario: Increase the employment-to-population rates for both youth and women to the global average by 2018


• Incidence of working poverty remains high in the region• Absolute number of working poor has reached around 200 million workers in 2013

Regional economic and labour market prospectsSub-Saharan Africa


Regional economic and labour market prospectsSub-Saharan Africa

• Economic growth in the region among the highest in the world over the last decade• But growth only had a modest impact on vulnerable employment until 2012

Policy recommendations 32

Policy recommendationsRenewed focus on the world of work is essential

Lack of policy coordination between monetary and fiscal policies has substantially increased labour market uncertainty,

Policies need to focus

on theWorld of work

Monetary policy is running the risk of fuelling new asset price bubbles rather than supporting employment creation

Global recovery in labour markets is being held back by a deficit of aggregate demand as public spending and labour incomes stagnate

Monetary policy remains accommodative and has helped reduce unemployment rates by 1-2 percentage points

Growth in numbers of long-term unemployed and increased labour market detachment is raising risk of emergence of structural labour market problems

Public and private debt remains high, forcing governments into consolidation and households into deleveraging


Policy recommendations1. Address weak aggregate demand

• A coordinated stimulus package could add 6.1 million jobs in G20 countries• Currently implemented fiscal consolidation packages will cost another 2.4 million jobs by

2020

34Policy recommendations

Policy recommendations2. Address high hiring uncertainty through better policy coordination

• Lack of policy coordination plays a major role in explaining high hiring uncertainty


Policy recommendations3. Address inactivity and skills mismatch through active labour market policies

+0.8%+3.9mil jobs

• Focus on active labour market policies to address structural issues...• ...could help add 3.9 million jobs in OECD countries by 2016

Global Employment Trends 2014Risk of a jobless recovery?

Employment Trends UnitInternational Labour OrganizationGeneva, Switzerland

global employment trends 2014

Economy & Finance