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Fiscal austerity making global job crisis worse, says ILO

Monday, 30 April 2012 9:46 AM

There is no recovery in sight for the global jobs crisis, a new report claims.

According to research by the International Labour Organization (ILO), austerity policies are damaging potential job creation and sluggish global growth is likely to make things worse.

Worldwide, an estimated 196 million people were unemployed at the end of 2011 and this is expected to rise to 202 million this year to reach 6.1 per cent, the World of Work Report 2012 reveals.

There is still a shortage of around 50 million jobs compared with pre-financial crisis figures from 2008, the ILO said.

“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 over 80 million people expected to enter the labour market during this period,” the report said.

In Europe, the unemployment rate has increased in nearly two-thirds of countries since 2010, but the labour market recovery has also stalled in other advanced economies, such as Japan and the United States.

The report states: “This is not a normal employment slowdown. Four years into the global crisis, labour market imbalances are becoming more structural and therefore more difficult to eradicate.”

Certain groups, such as the long-term unemployed, are at risk of exclusion from the labour market – which means they would be unable to obtain new employment even if there were a strong recovery, the ILO said.

At the same time, involuntary part-time employment and temporary employment have increased respectively in two-thirds and more than half of advanced economies.

“Austerity has not produced more economic growth,” Raymond Torres, director of the ILO Institute for International Labour Studies, said.

“The ill conceived labour market reforms in the short term cannot work either. These reforms in situations of crisis tend to lead to more job destruction and very little job creation at least in the short term.”

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