The International Labour Organization (ILO) yesterday warned that austerity measures were hurting job markets worldwide and predicted global unemployment of 202 million people this year, up 6 million from last year.
The ILO’s World of Work Report 2012: Better Jobs for a Better Economy said fiscal austerity and labor market reforms had had “devastating consequences” for employment, while mostly failing to cut deficits, and warned that governments risked fueling -unrest unless they combined tighter spending with job creation.
“The austerity and regulation strategy was expected to lead to more growth, which is not happening,” Raymond Torres, director of the ILO’s Institute for International Labour Studies, told journalists in Geneva.
“The strategy of austerity actually has been counterproductive from the point of view of its very objective of supporting confidence and supporting the reduction of budget deficits,” he said.
The report said about 50 -million jobs had disappeared since the 2008 financial crisis.
It predicted a global unemployment rate of 6.1 percent this year, or 202 million people, up 3 percent from the provisional estimate of 196 million for last year.
It forecast a rise to 6.2 percent next year as another 5 million people become unemployed.
“It is unlikely that the world economy will grow at a sufficient pace over the next couple of years to both close the existing jobs deficit and provide employment for the more than 80 million people -expected to enter the labour market,” the report said.
It warned that trends were especially worrying in Europe, where nearly two-thirds of countries had seen unemployment go up since 2010.
It said labor market recovery had also stalled in major economies such as Japan and the US.
A growing and better-educated work force was meanwhile struggling to find enough good jobs in places such as China, while workers still faced acute job shortfalls in the Arab world and Africa, it added.
Torres, the report’s lead author, was particularly critical of Europe, accusing it of “ill--conceived fiscal austerity.”
“For example in Spain, the deficit was reduced from a little over 9 percent of GDP in 2010 to 8.5 percent of GDP in 2011, a very small reduction after a drastic austerity program,” he said.
“The narrow focus of many -eurozone countries on fiscal austerity is deepening the jobs crisis and could even lead to another recession in Europe,” he said.
He singled out Latin America for praise, saying the region had seen an employment recovery and, in some cases, rising job quality.
The report found the risk of social unrest had gone down on average in Latin America as job prospects improved.
However, worldwide, the risk of unrest had increased in most countries, it said.
“This is not surprising given that good jobs remain scarce and income inequality is rising,” Torres said.
“There is a growing sense that those most affected by the crisis are not receiving adequate policy attention,” he said.
The ILO blamed austerity policies for reducing small business’ access to loans and urged governments to restore credit to small firms, strengthen labor market safety nets and adopt measures to help young workers and other vulnerable groups.