MercoPress. South Atlantic News Agency

Unemployment reveals impact of crisis on real economy

The global economic crisis is expected to lead to a dramatic increase in the number of people joining the ranks of the unemployed, working poor and those in vulnerable employment, the International Labour Office (ILO) said in its annual Global Employment Trends report released on Thursday.

Based on new developments in the labour market and depending on the timeliness and effectiveness of recovery efforts, the report says global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million if the situation continues to deteriorate. The ILO report also said that in this last scenario some 200 million workers, mostly in developing economies, could be pushed into extreme poverty. "The ILO message is realistic, not alarmist. We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession. Progress in poverty reduction is unravelling and middle classes worldwide are weakening. The political and security implications are daunting", said ILO Director-General, Juan Somavia. He called on the upcoming meeting of the G-20 on 2 April in London, alongside financial issues, to urgently agree on priority measures to promote productive investments, decent work and social protection objectives, and policy coordination. The new report updates a preliminary estimate released last October indicating that the global financial crisis could increase unemployment between 15 to 20 million people by 2009. Its key conclusions are as follows: Based on November 2008 IMF forecasts, the global unemployment rate would rise to 6.1% in 2009 compared to 5.7% in 2007, resulting in an increase of the number of unemployed by 18 million people in 2009 in comparison with 2007. If the economic outlook deteriorates beyond what was envisaged in November 2008, which is likely, the global unemployment rate could rise to 6.5%, corresponding to an increase of the global number of unemployed by 30 million people in comparison with 2007. In a current worst case scenario, the global unemployment rate could rise to 7.1% and result in an increase in the global number of unemployed of more than 50 million people. The number of working poor – people who are unable to earn enough to lift themselves and their families above the 2 US dollars per person, per day, poverty line, may rise up to 1.4 billion, or 45% of all the world's employed. In 2009, the proportion of people in vulnerable employment – either contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship – could rise considerably in the worst case scenario to reach a level of 53% of the employed population.