No 'green shoots' in the labour market

Juan Somavia

The financial crisis has evolved into an economic, social and employment crisis. Although there is evidence that the global recession may be bottoming out, at least in some countries, new jobs data released last week show that unemployment is increasing relentlessly.

The message is clear-though there may be "green shoots" for the global economy, there will be no immediate green shoots for the labour market for some time to come.

Despite some positive economic indicators, the jobs crisis continues to deepen. We are well within the ILO's estimate of a potential increase in unemployment of some 50 million in 2009 and an increase of some 200 million working poor by end 2009 over 2007.

Unemployment and informal employment are rising. Gains in poverty reduction are backsliding. Wage earnings and household incomes are declining. The middle classes are suffering. And with 45 million new entrants to the global job market annually, mostly young women and men, some 300 million new jobs will be required between now and 2015, just to keep up with the growth of the labour market.

We know from past crises that jobs recovery always lags behind economic recovery. If we do not act decisively now, we are looking at a jobs crisis of between six to eight years.

We cannot let this happen. Many countries have taken important action to stimulate their economies. It is now time to stimulate their labour markets. We must work together to shape policies and decisions that can accelerate the recovery in employment and shorten the lag between economic and labour market recovery as much as possible.

World leaders representing governments, labour and business from developed and developing countries came together at an ILO Summit on the jobs crisis in June to agree on a coordinated international and national response to the crisis.

This was expressed in a "Global Jobs Pact", an internationally agreed policy instrument negotiated by governments, business and trade unions that informs policy options in countries and of multilateral institutions to generate employment, restore enterprise growth and expand social protection.

The G8 meeting this week is an opportunity to relay this effort. At the meeting, I will deliver the message that we now have a framework for tackling the "human dimension" of the global economic crisis and getting people and businesses working again.

The pact identifies several key follow-up areas where an active system-wide response is needed. These include:

* Retain women and men in employment, as far as possible,

* Sustain enterprises, especially small and medium ones,

* Protect women and men and families from income losses,

* Strengthen coverage of basic social protection,

* Train and retrain working women and men and guide them towards available jobs,

* Support labour demand through future oriented public investments,

* Prepare the workforce for the jobs of tomorrow.

These measures represent tried and true economic and social policies that have worked in the past. And they have been crafted with the support of heads of state and government, labour ministers and other economic leaders working with the actors of the "real economy"-the governments, workers and employers who are represented at the ILO.

The Global Jobs Pact gives us the tools, backed by research and analysis, to chart a productive path to broad-based economic and social development providing hope and opportunities to all working families. The Pact contains options for all countries. In those countries with little fiscal capacity, national solutions can be supplemented by strong international cooperation.

The global economy should look different after the crisis, with broader social justice, principles of fairness in globalization, and coherent and greener economic policies. We must be creative. The nature of the crisis means solutions cannot be "business as usual."

We can decide to address head on the global jobs crisis, to act in a coordinated manner, to achieve greater cooperation across multilateral bodies. This will accelerate recovery and shorten the length and depth of the jobs crisis. In doing this we can build a world that is economically, socially, environmentally and politically more sustainable and that works for all.

Can we muster the political will to make this happen? The choice is ours and the time to act is now.

Juan Somavia is Director-General of the International Labour Organization, based in Geneva.