G20 Foundation Publications Australia 2014 | Page 32

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TRADE & FINANCE
ILO Director
General’s
address on
G20 labour
markets
The Director-General of the ILO, Guy
Ryder, joined the G20 Labour and
Employment Ministerial Meeting held in
Melbourne in September 2014, during
which the ILO presented a number of
reports on employment issues that
have been prepared to inform the
Ministerial discussions
TRADE & FINANCE
Thank you for the floor, Minister Abetz, and thank you
for the opportunity to present the joint work that the
ILO, OECD and World Bank have been undertaking together over
the course of this year at your request and in response to the
call by G20 Leaders last year for each G20 country to develop
growth strategies and employment action plans. And those overall growth trends do not give much cause for
optimism at the moment. Despite a modest economic recovery
in 2013-4, economic growth is expected to remain below trend
over the foreseeable future. The G20 jobs gap in 2012 was
about 55 million. The ILO estimates that the gap will continue
to widen until 2018, reaching 63 million that year.
It won’t come as a big surprise to any of the Ministers here
that despite the efforts made, current employment challenges
remain substantial for all G20 countries. “Jobless growth”
Africa have seen further increases in already high long-term
unemployment rates. However, some declines were recorded in
Brazil and the Russian Federation and to a lesser extent Turkey
and, although from a high base, also in Germany.
The median value of long-term unemployment as a share of
total unemployment had risen to 30.2 per cent by the first
quarter of 2014, up from 24.6 per cent at the end of 2007. In
several countries, the challenge of long-term unemployment, and
unemployment more generally, is particularly acute among youth.
The next slide addresses one element of the quality of
employment, that is the issue of informality.
Looking at the slide (below), you can see that large
employment gaps opened as a result of the financial crisis that
broke in 2007 and remain significant in most G20 countries.
Informal employment is high in emerging
economies
Jobs gaps in G20 compared to pre-2007 trend
Furthermore, the employment intensity of growth has also
been weakened in many countries. This figure shows that even
very high growth rates in China, India and Indonesia have not
produced comparable growth in employment.
Our projections of the future trend, based on IMF growth
projections, is that the gaps will remain large in advanced G20
countries at least to 2018 and indeed may even widen.
That said, in the last 12 months, the majority of the G20
countries have witnessed a modest reduction in the
unemployment rate. These positive developments were largely
due to welcome net job creation, especially in the United
States, but in some cases they resulted at least in part from
declines in the labour force participation rate.
Except for Turkey, Mexico and Germany, all of the other G20 countries
that did grow saw lower rates of job growth than economic growth. 1. Corresponds only to persons employed in the informal sector
2. Six cities only
In addition to the sheer size of the jobs gap, then, there are
clearly specific employment problems facing G20 economies. In a number of emerging G20 economies, the biggest challenge
lies in moving the labour force out of low productivity, low
wage informal employment and underemployment. This slide
shows, disaggregated by gender, the high levels of informality
in many emerging G20 countries. In addition, we have
observed an emergence of informal working relationships even
in the formal sector in some advanced G20 economies.
Long-term unemployment has grown in
many countries
This has to be noted while recalling that the rate of youth
unemployment declined in many countries but still remains at
historically high levels in others.
Coinciding with the sizeable jobs gap we looked at is a deterioration
in job quality in a number of G20 countries, and here we look at the
behaviour of real wage rates. Real wages have stagnated across
many advanced G20 economies and even fallen in some.
In the emerging G20 countries, jobs gaps are not as wide as an
industrialized countries but the prospect of closing the gaps in the
next five years is not very promising under current growth trends.
Weak economic recovery has led to weak wage
growth, especially in advanced economies
Jobs gaps in G20 compared to pre-2007 trend
*Selected urban areas. Q3 2007-Q3 2013 for the Russian Federation; and
Q1 2008-Q1 2014 for South Africa
In over half of the G20, the share of long-term unemployed
has increased as a share of total unemployment, in some cases
dramatically. These unemployed face daunting re-employment odds.
Particularly sharp increases took place in Spain as well as in
the United States, and countries such as Italy and South
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