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EMPLOYMENT LEVELS WORLDWIDE

PREPARED BY: ARUN SHARMA AMAN ARORA

Macroeconomic context for growth and employment


The global economic situation has improved,

but a stubborn deficit in jobs remains


More than three years have passed since the onset of the fastest and deepest drop in global economic activity since the Great Depression. Results being Global unemployment soared to an all-time high. Other labour market indicators revealed additional forms of severe labour market distress: falling employment-to population ratios, increases in vulnerable forms of employment, stagnant labour productivity growth and rising discouragement.

Upgraded economic growth in 2010, yet

downside risks predominate


The global economy had begun to contract on an annualized basis in the fourth quarter of 2008. According to IMF 60 countries, an unprecedented 52 were contracting in the second quarter of 2009. By the third quarter of 2009, the rate of decline had begun to moderate, yet 48 out of 60 economies were still contracting. Overall, the IMF estimates that global GDP declined by 0.6 per cent in 2009.

A recovery in growth that has not brought

about a comparable recovery in employment


Yet the evidence is clear that the recovery in economic growth has not been matched by a similar expansion in employment opportunities in many countries. In Q4 2008, the number of countries with declining employment-to-population ratios exceeded the number with rising ratios and the situation quickly and sharply worsened thereafter.

Global Employment Situation


1.

Employment Global employment continues to increase, though with steep declines in many developed economies. Employment contracted sharply in 2009 in the Developed Economies and European Union (2.2 per cent) and Central and South-Eastern Europe (non-EU) and CIS (0.9 per cent) regions, but total employment continued to grow in all other regions during the crisis. The employment-to-population ratio, which represents the share of people of working age in employment, declined from 61.7 per cent in 2007 to 61.2 per cent in 2009 and was little changed at 61.1 per cent in 2010.

Many developed economies are simply not generating

sufficient employment opportunities to absorb growth in the working-age population, which again reflects the ongoing lag between economic recovery and a recovery in employment in this region.

2. Unemployment

Despite the rapid recovery in the global economy that

took place in 2010, following two years of severely adverse labour market conditions, global unemployment remained elevated in 2010. The number of unemployed stood at 205 million in 2010, essentially unchanged from the year earlier and 27.6 million higher than in 2007.

The global unemployment rate stood at 6.2 per cent in

2010 (with a confidence interval from 5.9 to 6.5 per cent), versus 6.3 percent in 2009 and 5.6 per cent in 2007. In the Developed Economies and European Union region, which saw the largest regional increase in the unemployment rate between 2007 and 2009 (2.6 percentage points, see table A2), the unemployment rate continued to increase in 2010, to 8.8 per cent. In Central and South-Eastern Europe (non-EU) and CIS and East Asia, unemployment rates declined in 2010.

Conclusions
Global GDP growth peaked at 5.3 per cent in 2007,

before falling sharply to 2.8 per cent in 2008 and contracting by further 0.6 per cent in 2009. Employment growth at the global level fell to 0.7 per cent in 2009 and the global unemployment rate increased to 6.3 per cent, from 5.6 per cent in 2007. The number of unemployed around the world surged from 177.3 million in 2007 to 205.2 million in 2009, an increase of 27.9 million.

Global labour productivity growth slowed from 3.3 per

cent in 2007 to 1.3 per cent in 2008, and fell further to 1.4 per cent over 2009. The greatest declines in labour productivity in 2009 were in Central and South-Eastern Europe (non-EU) and CIS (5.5 per cent), Latin America and the Caribbean (2.4 per cent), the Middle East (1.3 per cent) The crisis halted a steady decline in the share of workers living in poverty. One out of every five workers in the world is estimated to have been living with their family in extreme poverty of less than US$ 1.25 per person per day in 2009.