www.adapt.it, 27 January 2012
Grim Projections from the new ILO Report. A
Summary of Global Employment Trends 2012
By Francesca Fazio
The just-released ILO global employment report (Global Employment Trends 2012) paints a grim
picture on trends and future prospects of global labour markets. Over the next 10 years, the world’s
economies will face a serious challenge: the creation of 600 million jobs to guarantee a sustainable
In the fourth year of the crisis there are still 27 million more unemployed workers than in 2007 at a
global level, with the number of unemployed that reached the critical threshold of 200 million. Even
worse, the figure understates the extent of the global employment shortfall. As a consequence of
discouragement, global labour force dropped by 29 million during the crisis, mainly affecting adult
women and young men. If all these potential workers were counted as unemployed, the
unemployment level would increase to over 225 million, i.e. a rate of 6.9%, versus the current rate
of 6%.
In the developed economies the situation is particularly serious, with 6 million fewer people in the
labour force, who, if added to the unemployed, would raise the region’s unemployment rate from
8.5% to 9.6%. A key factor behind the sharp rise in unemployment is that in most regions the crisis
has impacted on employment to a greater extent than on labour productivity, while austerity
measures in Europe also threaten to further harm labour markets and increase the long-term effects
of the crisis.
Due to the sharp decline in the employment-generating capacity of the global economy, the
employment-to-population ratio declined strongly during the crisis from 61.2% in 2007 to 60.2% in
2010, accounting for the largest decline since 1991. The decline was driven by developed
economies and the EU, as well as East Asia and South Asia.
ILO predicts three scenarios: baseline, downside and upside. The baseline scenario projects 3
million more unemployed in 2012, subdued employment growth rates and a substantial drag on
wages, the largest impact being expected for the developed economies and the European Union
According to the baseline scenario, the above mentioned region’s unemployment rate would rise to
8.5% in 2012 and to 8.4% in 2013, compared to a downside projection of 9.1% in 2013.
A more optimistic view (i.e. the upward scenario) predicts a faster recovery from the euro zone
crisis, with global unemployment falling by 1 million in 2012 and by 1.7 million in 2013.
However, regardless of which scenario will actually become reality, growth is currently painfully
weak and achieved by squeezing more out of the existing workforce, especially in developed
economies. This, in turn, has resulted in a negative loop where high unemployment and low wage
growth limit both consumption and investment, with major negative consequences on growth.
Young people continue to be hit the hardest by the crisis: 74.8 million youth aged 15 - 24 were
unemployed in 2011, 4 million more than 2007, accounting for an unemployment rate of 12.7%,
still 1 percentage point higher than before the crisis. Moreover, youth have 3 times higher
probabilities to be unemployed compared to adults. Youth in developed economies have been hit
the hardest: they account for one third of the labour force shortfall versus less than 12% of the
region’s labour force, with 2 million fewer youth in the labour force than expected. But even the
employed face considerable difficulties, finding themselves in part-time employment and often on
temporary contracts. In developing countries, youth are disproportionately represented among the
working poor.
Vulnerable workers (own-account workers and unpaid family workers) are 1.52 billion globally, 23
million more than in 2009 with an increase of 136 million since 2000, reflecting a declining trend in
terms of rate (from 52.8% in 2000 to 49% in 2011).
The ILO is developing policies to prevent a worsening of the jobs crisis. First of all, greater
coordination at the global level is required, especially in those countries that still have room for
manoeuvre. Second, there is the urgent need to reform financial systems to ensure access to credit,
especially for small and medium-sized enterprises which create most jobs, as well as to restore
credibility and confidence. Third, the report underlines that targeting the real economy to support
job growth without undermining public finances is what is now needed most.
Francesca Fazio
Editorial Coordinator