United Nations – International Labour Organisation (ILO) Director-General, Mr Guy Ryder, said growth of global economy had slipped gradually but steadily to the weakest pace in the immediate aftermath of the financial crisis.
Ryder stated this on Friday in a report he presented to the International Monetary and Financial Committee at the ongoing Spring Meetings of the World Bank and the International Monetary Fund (IMF) in Washington D.C.
He said that with the latest downward revisions in growth prospects, jobs gap of people not in work that would have had a job if pre-crisis growth had resumed could rise to more than 80 million by 2020.
He stated that weakening growth had slowed down transformation of low productivity and poorly remunerated jobs into better work opportunities.
Ryder said that reduction in the share of working poverty in total employment and the absolute number of people living and working in poverty had stalled.
“Labour shares in national income were on a downward trend in most large economies in recent times,’’ he said.
He explained that declining labour income share in many countries at the same time limited household consumption and reduced overall aggregate demand, “which have been further weakened by low investment leading to low global economic growth’’.
“It showed that it is vital that current trends of rising inequality and slowing growth are quickly reversed,’’ he added.
He suggested that the reversion should be done through concerted action to reduce inequality, generate decent jobs and sustainable enterprises, and invest in infrastructure for faster, greener and more inclusive growth.
This, according to him, is in line with the Paris Agreement on climate change adopted in December, 2015.
With private investment and household consumption weak in many countries and unlikely to revive with sufficient vigour and pace to reinvigorate growth in the near term, Ryder said that governments needed to take the initiative.
He said that while different countries faced different constraints and opportunities in taking action, a package of employment and social policies could add to fiscal action to make important contribution to macroeconomic strategies.
He stated that this would make for inclusive growth, especially if pursued in contestation with other countries.
The ILO boss said that work was central to people’s lives and underperformance of the global economy, especially in terms of jobs and wages, was a major cause of heightened political and social tensions.
He said that access to decent work had become part of the international approach to the refugee crisis.
He warned that consequences of inaction in 2016 would make it harder to escape a low growth trap and put at risk the world envisioned by leaders at the UN General Assembly last September.
In the report, Ryder said that there were more than 70 million people not in work today who would have had a job if pre-crisis growth had resumed, adding that with latest downward revisions in growth prospects, jobs gap could rise to more than 80 million by 2020.
He added that outright unemployment remained high in many advanced countries and was rising in some emerging economies, adding also that participation rates were falling in many countries.
He pointed out that between 1995 and 2015, global female labour force participation rate decreased from 52.4 to 49.6 per cent.
“In 2015, an estimated 327 million employed people were living in extreme poverty and 967 million in moderate and near poverty.
“The share of own account and unpaid family workers in total employment, which accounted for most of those working in the informal economies of the developing world stuck at around 46 per cent.
“It is more than 70 per cent in sub-Saharan Africa and South Asia,’’ he said. (NAN)
banker of the day - FREE banker tips from experts