Informe Sobre El Trabajo en El Mundo 2012

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Resumen

ORGANIZACIN INTERNACIONAL DEL TRABAJO

INSTITUTO INTERNACIONAL DE ESTUDIOS LABORALES

Informe sobre el trabajo en el mundo 2012Mejores empleos para una economa mejor


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1 Resumen

Cmo salir de la trampa de

la austeridad?

La situacin del empleo se est deteriorando en Europa y ha dejado de mejorar en

muchos otros pases ...

Durante el ao pasado, los mercados de trabajo se vieron afectados por la

desaceleracin del crecimiento mundial. Un hecho que resulta especialmente

problemtico si se tiene en cuenta que los mercados laborales no se haban recuperado

totalmente de la crisis mundial que estall en 2008: todava existe un dficit de

aproximadamente 50 millones de empleos en comparacin a la situacin anterior a la

crisis (Captulo 1). Es poco probable que durante los prximos dos aos la economa

mundial crezca a un ritmo suficiente para reducir el actual dficit de empleo, y ofrecer

trabajo a ms de 80 millones de personas que se calcula que entrarn en el mercado

laboral durante este perodo.

Esta tendencia es particularmente preocupante en Europa, donde la tasa de desempleo

aument en cerca de dos tercios de estos pases desde 2010; pero la recuperacin del

mercado de trabajo se ha estancado tambin en otras economas avanzadas como

Japn y Estados Unidos. En otras regiones, los progresos en materia de empleo fueron

dbiles con respecto a las necesidades de una poblacin en edad de trabajar cada vez

ms numerosa y mejor educada, como en China. Y el dficit de empleo sigue siendo

considerable en gran parte de la regin rabe y frica.

como resultado, la crisis mundial del empleo ha entrado en una nueva fase, de

carcter ms estructural.

Esta no es una desaceleracin normal del desempleo. Despus de cuatro aos de crisis

mundial, los desequilibrios en el mercado del trabajo son ms estructurales, y por lo

tanto, ms difciles de erradicar. Ciertos grupos de personas, como los desempleados de

larga duracin, corren el riesgo de quedar excluidos del mercado laboral. Esto significa

que no podran obtener un nuevo empleo incluso aunque se produzca una fuerte

recuperacin.


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2 Informe sobre el trabajo en el mundo 2012: Mejores empleos para una economa mejor

Adems, para una parte cada vez mayor de los trabajadores que s tienen trabajo, el

empleo es ms inestable o precario. El empleo a tiempo parcial y temporal de carcter

involuntario aument en dos tercios y en ms de la mitad de las economas avanzadas,

respectivamente. La proporcin de empleo informal permanece alta, y se sita en ms

del 40 por ciento en dos tercios de los pases emergentes y en desarrollo para los cuales

se dispone de datos. Adems, las mujeres y los jvenes se ven afectados de maneradesproporcionada por el desempleo y la precariedad laboral. En concreto, las tasas de

desempleo juvenil aumentaron en cerca del 80 por ciento de las economas avanzadas y

en dos tercios de las economas en desarrollo.

La inestabilidad laboral es, sobre todo, una tragedia humana para los trabajadores y sus

familias; pero adems supone un desperdicio de la capacidad productiva, ya que hay

una tendencia a perder las competencias como resultado de una rotacin excesiva entre

empleos y largos perodos de desempleo o inactividad. Una mayor inestabilidad laboral

significa, por lo tanto, una productividad ms dbil en el futuro y menos oportunidadespara prosperar y ascender profesionalmente.

El dficit de empleo va de la mano de un dficit prolongado de inversin, otra seal de

que la crisis ha entrado en una nueva fase. La cantidad de dinero sin invertir en las

cuentas de grandes empresas ha alcanzado niveles sin precedentes (Captulo 4).

Mientras que, en el caso de las economas avanzadas, las pequeas empresas siguen

teniendo dificultades de acceso al crdito, que les permitira invertir y crear puestos de

trabajo. Es importante destacar que el Informe constata que las inversiones son ms

voltiles, y que esto ha exacerbado la precariedad del empleo tanto en las economasavanzadas como en las emergentes y en desarrollo.

Por ltimo, la sociedad se est volviendo cada vez ms ansiosa ante la falta de trabajos

decentes. En 57 de los 106 pases, el ndice de Descontento Social, construido a efectos

de este Informe, aument en 2011 en comparacin con 2010. En Europa, Oriente

Medio, frica del Norte y frica Subsahariana se registraron los ndices ms altos de

riesgo de descontento social. En promedio, Amrica Latina donde ha habido un cierto

grado de recuperacin del empleo y, en algunos casos, mejoras en la calidad del trabajo

ha experimentado una disminucin del riesgo de descontento social.

El deterioro de la situacin refleja la trampa de la austeridad en las economas

avanzadas, sobre todo en Europa ...

Desde 2010, y a pesar de las declaraciones a favor del empleo en las sucesivas reuniones

del G20 y otros foros globales, la estrategia poltica cambi sus prioridades alejndose

de la creacin y mejora del empleo, y concentrndose en cambio en la reduccin de los

dficits fiscales a toda costa. En los pases europeos, la reduccin del dficit fiscal ha


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3 Resumen

sido considerada esencial para calmar los mercados financieros. Pero incluso en pases

que no han sufrido los efectos de la crisis, esta estrategia est siendo aplicada por

razones preventivas, reduciendo los dficits fiscales para evitar cualquier reaccin

negativa por parte de los mercados financieros. Este enfoque pretenda preparar el

camino para mayores inversiones y crecimiento, junto con dficits fiscales inferiores.

Adems, como parte del cambio poltico, la mayora de las economas avanzadas han

flexibilizado las normas del trabajo y debilitado las instituciones del mercado laboral

(Captulo 2), y adems se han anunciado ms medidas de liberalizacin. Estas medidas

estn siendo adoptadas con la esperanza de que los mercados financieros reaccionen de

manera positiva, y as reforzar la confianza, el crecimiento y la creacin de empleo.

Sin embargo, estas expectativas no han sido satisfechas. En los pases que aplicaron el

enfoque de la austeridad y de la liberalizacin en su mayor extensin, principalmente en

los pases del sur de Europa, el crecimiento econmico y del empleo continu

deteriorndose. Adems, en muchos casos, estas medidas tambin fracasaron a la hora

de estabilizar la situacin fiscal. La razn fundamental para estos fracasos es que estas

polticas implementadas en un contexto de perspectivas de demanda limitada y con la

complicacin adicional de un sistema bancario en medio de su proceso de

desapalancamiento - no tienen la capacidad de estimular la inversin privada. La

trampa de la austeridad se est accionando. La austeridad, en efecto, ha producido un

crecimiento econmico ms dbil, incrementado la volatilidad y empeorando el balance

financiero de los bancos ocasionando una mayor contraccin del crdito, menores

inversiones y, en consecuencia, mayores prdidas de empleos. Paradjicamente esto haafectado de manera negativa a los presupuestos de los gobiernos y, por lo tanto, ha

aumentado las exigencias de mayor austeridad. La realidad es que ha habido pocos

progresos en los dficit fiscales de los pases que aplicaron enrgicamente las polticas

de austeridad (Captulo 3).

En relacin a las polticas de liberalizacin, el Informe seala que fracasarn en el

objetivo de impulsar el crecimiento y el empleo a corto plazo, el horizonte temporal

clave en una situacin de crisis. De hecho, los efectos de las reformas de los mercados

laborales en el empleo dependen en gran medida del ciclo coyuntural. Ante unarecesin, normas menos rgidas pueden dar lugar a ms despidos sin apoyar la creacin

de empleo. Del mismo modo, un debilitamiento de la negociacin colectiva es probable

que genere una espiral descendente de los salarios y, por consiguiente, retrase an ms

la recuperacin.

En general, el Informe confirma las conclusiones de estudios anteriores que muestran

que no existe una relacin evidente entre las reformas del mercado laboral y los niveles

de empleo. De manera interesante, dentro del rango en el cual la mayora de los pases


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se encuentran, regulaciones laborales adecuadas tienden a estar relacionadas

positivamente con el empleo. Y lo que es ms importante, las regulaciones laborales mal

diseadas pueden afectar negativamente al funcionamiento del mercado laboral. En

estos casos hay motivos para considerar reformas como parte del dilogo social y

adoptadas conjuntamente con medidas de proteccin social. Esta poltica ha sido

aplicada con xito en el pasado reciente en pases como Austria y Brasil.

pero se est extendiendo a otros pases.

Muchos pases emergentes y en desarrollo adoptaron la estrategia de estimular la

demanda interna con el objetivo de compensar las dbiles perspectivas de exportacin a

las economas avanzadas. Existen seales de que en algunos de estos pases, como India,

Amrica Latina, Sudfrica y, ms recientemente, China, los salarios han aumentado para

recuperar terreno en relacin a la productividad. La inversin pblica y la proteccin

social tambin fueron fortalecidas y la integracin regional ha demostrado ser favorable

en este sentido.

No obstante, incluso en estos pases, los mercados laborales y las inversiones reales no

son inmunes al debilitamiento econmico mundial. Los flujos voltiles de capital

tambin han agravado la inestabilidad de la economa real y la posibilidad de crear

mejores empleos.

Por lo tanto, es crucial insistir en el enfoque actual de estimular la demanda interna,

asociado con una mejor aplicacin de las normas fundamentales del trabajo y medidas

para evitar flujos de capital desestabilizadores.

Existe un enfoque alternativo ...

Es posible escapar de la trampa de la austeridad. El Informe sobre el Trabajo en el

Mundo del ao pasado presentaba un enfoque triple, que se mantiene vigente. Primero,

las instituciones del mercado laboral deberan fortalecerse de manera que los salarios

crezcan al mismo ritmo que la productividad, comenzando en los pases con supervit.

En la situacin actual, es necesario tener en cuenta un aumento riguroso y coordinado

del salario mnimo. Tambin podran ser tiles mayores esfuerzos para implementar lasnormas fundamentales del trabajo, sobre todo en los pases emergentes y en desarrollo

donde existen problemas. La ratificacin de los Convenios fundamentales de la OIT por

parte de todos los pases del G20 dara una seal positiva en este sentido.

Segundo, es esencial reanudar el acceso al crdito y crear un ambiente empresarial ms

favorable para las pequeas empresas. Esto es particularmente urgente en los pases de

la zona Euro, donde la poltica del Banco Central de ofrecer liquidez a los bancos ha

fracaso a la hora de incentivar el crdito destinado a la economa real. Podra tambin


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5 Resumen

ser necesaria una imposicin ms alta para las empresas que no reinvierten sus

ganancias, y/o una imposicin menor para aquellas empresas que dan prioridad a las

inversiones y a la creacin de empleo.

Tercero, es posible promover el empleo y al mismo tiempo cumplir con los objetivos

fiscales. El Informe demuestra que un cambio neutral desde el punto de vista fiscal en lacomposicin de los gastos y los ingresos creara entre 1,8 y 2,1 millones de empleos en

un plazo de 1 a 2 aos. En el caso de los pases emergentes y en desarrollo, los esfuerzos

deberan concentrarse en la inversin pblica y en la reduccin de la pobreza y las

desigualdades de los ingresos y en estimular la demanda agregada. En las economas

avanzadas, la prioridad deberan ser las personas desempleadas, especialmente los

jvenes, a fin de garantizar que reciban el apoyo adecuado para encontrar nuevos

empleos.

Ante todo, es el momento de avanzar hacia una estrategia orientada hacia el

crecimiento y hacia el empleo. Esto ayudara a coordinar las polticas y a evitar el

contagio ocasionado por la austeridad fiscal. En Europa, la estrategia podra incluir un

enfoque coordinado a fin de solucionar la crisis de la deuda, para lo cual unos

mecanismos de financiacin innovadores y una mejor utilizacin de los Fondos

Estructurales Europeos adecuadamente reformados para enfrentar mejor el problema

podran ser instrumentos fundamentales.

que requiere adoptar la idea de que las polticas que favorecen el empleo tienen un

efecto positivo en la economa y que la voz de las finanzas no debera guiar la toma de

decisiones.

La explicacin del actual enfoque poltico es la premisa de que el crecimiento es el

resultado de la austeridad y que los empleos, en cambio, son una consecuencia del

crecimiento. Por ello, los mayores esfuerzos hasta la fecha se han concentrado en

reducir los dficits y restablecer el crecimiento mundial hacia valores positivos con la

creencia de que, en lo sucesivo, producir la creacin de empleos. Como consecuencia,

los esfuerzos ms directos para estimular la creacin de empleo y potenciar los ingresos

de los ms vulnerables a la crisis han tenido una importancia secundaria.

Puesto que ahora existen indicios de que estas premisas han demostrado ser

contraproducentes, es esencial progresar con la alternativa, es decir, un enfoque

centrado en el empleo, tal y como se describi anteriormente. Adems es importante

nutrir este enfoque alternativo con ejemplos concretos de polticas que funcionan, para

lo cual la OIT ha desempeado un papel fundamental a travs de la adopcin del Pacto

Mundial para el Empleo y podra contribuir an ms como foro de anlisis de polticas.


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Otro factor en juego es el desequilibrio entre la voz de la economa real y la del sector

financiero. Ambas son importantes y ambas necesitan ser escuchadas. Para subsanar

esto, primero debera prestarse atencin a la creacin de observatorios sociales y del

empleo a nivel nacional. Esta medida puede ayudar a identificar un lmite mximo de

desempleo que de ser superado seran necesarias nuevas medidas, de manera muy

similar a los objetivos de inflacin. Esta tarea podra ser facilitada gracias alestablecimiento de observatorios independientes y fiables a fin de supervisar y anticipar

tendencias en el mercado laboral, que podran ser responsables de presentar

evaluaciones independientes del impacto sobre el empleo de las propuestas polticas. Su

misin sera advertir a los gobiernos contra la adopcin o continuacin de polticas que

no tienen probabilidades de alcanzar los objetivos de desempleo.

Segundo, existen argumentos slidos para establecer foros de consulta nacionales,

donde se discutan las polticas econmicas y sociales por los gobiernos y los

interlocutores sociales. Si bien los resultados no seran vinculantes, este tipo deconsultas pueden ofrecer a los gobiernos informacin importante sobre la situacin

actual del mercado laboral y una perspectiva del desempleo. El foro podra tambin

desempear un papel central en colaborar y consultar con el observatorio o agencia

nacional creada para supervisar y evaluar la evolucin del mercado laboral y el impacto

de las polticas.

Finalmente, los esfuerzos nacionales para pasar a polticas que garantizarn niveles de

empleo ms altos se vern facilitados en gran medida por las reformas en la gobernanza

de la economa mundial. El objetivo principal de esta reforma es ofrecer un nivel alto yestable de demanda efectiva en la economa mundial. Esto implicara (i) garantizar una

coordinacin global eficaz de las polticas econmicas para eliminar polticas del tipo

molestar a mi vecino que conducen a desequilibrios mundiales y cohben el potencial

de crecimiento; (ii) eliminar la amenaza constante a la estabilidad econmica mundial

provocada por los flujos financieros transfronterizos voltiles y no regulados; y (iii)

desarrollar polticas macroeconmicas coordinadas para hacer frente a futuras crisis

econmicas.

En pocas palabras, el Informe exhorta a los pases a instaurar las condiciones necesariaspara preparar un cambio drstico en el actual enfoque poltico. Destaca la necesidad de

un enfoque que reconozca la importancia de colocar el empleo entre las prioridades de

la agenda poltica y la necesidad de coherencia entre las polticas macroeconmicas,

sociales y del empleo. Esto requiere cambios significativos en la gobernanza interna y

mundial, lo que supone una labor compleja. Aunque la tarea es exigente, los avances en

esa direccin sern premiados con mejores perspectivas de empleo y una economa ms

eficiente.


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Informe sobre el Trabajo en el Mundo 2012 | Mejores empleos para una economa mejor 1

Informe sobre el Trabajo en el Mundo 2012

Resumen de Espaa

El desempleo en Espaa contina aumentando

El impacto de la crisis mundial en el mercado de trabajo espaol ha sido mucho msfuerte que en la mayora de los pases de la UE. En el cuarto trimestre de 2011, la tasa de

de desempleo se sito en el 22,8 por ciento, lo que supuso un aumento de 2,5 puntos

porcentuales con respecto al mismo trimestre del ao anterior y ms de 14 puntos

porcentuales por encima de la de 2007 (grfico 1).

El desempleo ha afectado en especial a aquellos trabajadores ms vulnerables, en concretoa los jvenes y a los desempleados de larga duracin. La tasa de desempleo juvenil subi

hasta situarse en el 48,6 por ciento en el cuarto trimestre de 2011, aumentando 30 puntos

porcentuales desde 2007 (grfico 2). Asimismo, ms del 43 por ciento de los

desempleados han permanecido sin empleo durante un periodo superior al ao un cifra

considerablemente superior a la observada en el contexto internacional.

Espaa contina siendo el pas europeo con un mayor porcentaje de trabajadores concontrato temporal (25,4 por ciento), a pesar de la elevada destruccin de empleo temporal

durante la crisis. Adems, ms del 90 por ciento del empleo temporal en Espaa es de

carcter involuntario.

El impacto social de la actual crisis econmica se ha visto multiplicado, ya que elincremento del desempleo y la cada de los ingresos han agravado las desigualdades.

Como consecuencia de ello, la crisis ha supuesto un crecimiento en el ndice de Gini en

2,6 puntos porcentuales entre 2007 y 2010.

Grfico 1. Cambio en la tasa de desempleo entre Q4 2010 y Q4 2011 (puntos porcentuales)

Fuente: Estimaciones del IIEL en base a Eurostat.

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0

2

4

6

8

Islandia

Alemania

EstadosUnidos

Blgica

Finlandia

Japn

Suecia

Korea,Rep.De

Noruega

Canada

Australia

Dinamarca

Francia

Luxemburgo

Austria

Irlanda

ReinoUnido

PasesBajos

Italia

Espaa

Portugal

Grecia

Instituto Iternacional

de Estudios Laborales

Under Embargo until 23h01 GMT 29 April 2012


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Grfico 2. Tasa de desempleo juvenil (15-24) en Q3 2010 y Q3 2011

Fuente: Estimaciones del IIEL en base a Laborsta.

y las medidas de austeridad fiscal han retrasado la recuperacin del mercado

de trabajo.

Desde que el dficit pblico alcanz su mximo en 2009 al situarse en el 11,2 por cientodel PIB, Espaa ha adoptado varias medidas de consolidacin fiscal que han tenido

importantes implicaciones sobre el empleo y las condiciones sociales. De hecho, el gasto

fiscal como porcentaje del PIB disminuy en 3 puntos porcentuales entre los terceros

trimestres de 2009 y 2011 debido a importantes recortes en los salarios de los

trabajadores pblicos y en la inversin. Al mismo tiempo, el porcentaje de los ingresos

pblicos en el PIB se increment en 0,6 puntos porcentuales durante el mismo periodo,

explicado en gran medida por el incremento en 2,8 puntos porcentuales de los impuestosindirectos como porcentaje del PIB. Adems, los Presupuestos Generales del Estado

recogen una reduccin del gasto pblico de 0,9 puntos porcentuales en 2012, situando al

gasto social en el centro de los recortes.

Las medidas de austeridad han afectado al crecimiento y al empleo en el corto plazo y,por el momento, no se han traducido en una reduccin significativa del dficit fiscal.

Por otro lado, el crecimiento de las exportaciones y de la inversin no han compensado elimpacto negativo que las medidas de austeridad tienen sobre la demanda privada. Las

exportaciones, que haban crecido a una tasa anual por encima del 15 por ciento en 2010,

crecieron al 5 por ciento en 2011, reflejando la nueva recesin econmica que han sufrido

la mayor parte de los pases europeos. Al mismo tiempo, la inversin ha disminuidodebido a la cada de la inversin pblica y a la contraccin de la inversin privada

motivada por las fuertes restricciones en el acceso al crdito.

El desafo consiste en reducir el dficit en el medio plazo sin poner en peligro la

recuperacin del mercado de trabajo

Fomentar la estabilidad fiscal al mismo tiempo que se promueve la creacin de empleo:Lograr unas cuentas pblicas saneadas tiene una importancia fundamental. No obstante, la

estabilidad fiscal no debera ser un objetivo en s mismo, sino el mecanismo para logar

una recuperacin econmica y laboral ms rpida y equitativa.

Apoyar la inversin productiva mediante la reanudacin del crdito a la economa real,en especial a las PYME.: La recuperacin econmica no ser posible hasta que no se

0

10

20

30

40

50

PasesBajos

Austria

Japn

Alemania

Islandia

Australia

Finlandia

Canada

EstadosUnidos

Suecia

Francia

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Korea,Rep.De

Dinamarca

Luxemburgo

NuevaZelanda

ReinoUnido

Blgica

Italia

Irlanda

Portugal

Grecia

Espaa

2010-Q3 2011-Q3


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reanude el crdito a las pequeas y medianas empresas (PYMEs). Por lo tanto, incentivar

la inversin y apoyar a las PYMEs resulta crucial para lograr la creacin de empleo.

Algunas medidas deseables seran disponer de un sistema de garantas de crdito,

aumentar el nmero de mediadores que consideran peticiones de crdito que no han sido

atendidas por los bancos y proveer directamente de liquidez a los bancos para que puedan

financiar las operaciones de las pequeas y medianas empresas. Sobre todo, se debe

reformar el sistema financiero para asegurar que se centre en su verdadera labor de

proveer de crdito a la economa real. En este sentido, merece la pena considerar lacreacin de una banca pblica que se dedique a la promocin de la inversin en sectoresestratgicos, como ya existe en otros pases.

Espaa ha modificado recientemente su legislacin sobre mercado de trabajo. Sinembargo, de acuerdo con elInforme sobre el trabajo en el mundo 2012 estos cambios han

estado relacionados con la regulacin de los costes de despido y de los tipos de contrato y

no han tenido en cuenta una visin ms comprensiva de la proteccin laboral. En este

sentido, resulta fundamental asegurar que las personas desempleadas, en especial los

jvenes, reciben el apoyo adecuado a la hora de buscar un nuevo empleo. Del mismo

modo, los intentos por adentrarse en una espiral descendente de los salarios seran

contraproducentes. El dilogo social podra ayudar a prevenir esto mientras se recupera el

clima social y la inversin.

Informe sobre el Trabajo en el Mundo 2012 est disponible en (www.ilo.org/INST). Para mayor

informacin, los periodistas estn invitados a contactar con Raymond Torres (tel: +41 22 799 7908;email: [email protected]), Director del Instituto Internacional de Estudios Laborales de la OIT.


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World of Work Report 2012


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INERNAIONAL LABOUR ORGANIZAIONINERNAIONAL INSIUE FOR LABOUR SUDIES

World of Work Report 2012Better jobs for a better economy


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Published by the International Institute or Labour Studies

Te International Institute or Labour Studies (IILS) was established in as an autonomous acilityo the International Labour Organization (ILO) to urther policy research public debate and the shar ingo knowledge on emerging labour and social issues o concern to the ILO and its constituents labourbusiness and government.

World o work report : Better jobs or a better economy/Internat ional L abour Oce. Geneva: ILO

International Labour Oce

employment / unemployment / crisis / social unrest / debt / austerity / employment protection /developed countries / developing countries

First published byInternational Labour OceCH- Geneva Switzerland

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Co-published in South Asia byAcademic Foundation/ Bharat Road ( Ansari Road) Darya GanjNew Delhi India

ww w.academicoundation.com

Copyright International Labour Organi zation (International Institute or Labour Studies).

Short excerpts rom this publication may be reproduced without authorization on condition that thesource is indicated. For r ights o reproduction or translation application should be made to the DirectorInternational Institute or Labour Studies P.O. Box CH- Geneva Switzerland.

ISBN ---- (print)ISBN ---- (web pd)

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Te responsibility or opinions expressed in signed articles studies and other contributions o this volumerests solely with their authors and their publication does not constitute an endorsement by the Inter-national Institute or Labour Studies o t he opinions expressed.

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v

Who are the authors of World of Work Report 2012?

Te report has been prepared by sta o the International Institute orLabour Studies with inputs rom other ILO colleagues and is publishedunder the responsibility o the Institutes Director. Chapter authors are:

c Editorial: Raymond orres

c Uma Rani Federico Curci and Pelin Sekerler Richiardi (Chapter )

c Sandrine Cazes (Employment Sector) Sameer Khatiwada andMiguel Angel Malo (Universidad de Salamanca) (Chapter )

c

Vernica Escudero and Elva Lpez Mourelo (Chapter )c Marva Corley-Coulibaly and Daniel Samaan (Chapter )

Raymond orres edited and coordinated the Report. Steven obin pro-vided contributions to Chapters and . Matthieu Charpe and SteanKhn developed simulations o dierent policy options based on theGlobal Economic Linkages (GEL) model.

We are grateul to the ILO Director-General or his stimulating guidance.

Excellent eedback on earlier versions o the report was provided by theInstitutes Expert Group which includes: Werner Eichhorst RichardFreeman Maria Jepsen Johannes Jtting Frdric Lerais Isabel OrtizMarcio Pochmann Alakh Sharma Nikolai Staehler Dannielle Venn andRobert P. Vos.

Our thanks to ILO colleagues in the Social Dialogue Sector who providedvery helpul comments especially Michel Binon Susan Hayter MlanieJeanroy Angelika Mul ler and Corinne Vargha. In add ition we aregrateul to the rends Unit o the ILO Employment Sector or providingthe global unemployment projections.

Te International Institute for Labour Studies was establishedby the International Labour Organization in as an autonomous centreor advanced studies in the social and labour eld.


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The employment situation is deteriorating in Europe

and is no longer improving in many other countries

Over the past year labour markets have been aected by the slowdown in globalgrowth. Tis is all the more problematic because labour markets had not ullyrecovered rom the global crisis that erupted in : there is still a decit o

around million jobs in comparison to the pre-crisis situation (Chapter ). It isunlikely that the world economy will grow at a sucient pace over the next coupleo years to both close the existing jobs decit and provide employment or the over million people expected to enter the labour market during this period.

Te trends are especially worrying in Europe where the unemployment ratehas increased in nearly two-thirds o these countries since ; but labour marketrecovery has also stalled in other advanced economies such as Japan and theUnited States. Elsewhere employment gains have weakened in terms o the needso a growing better educated working-age population as in China. And jobs de-icits remain acute in much o the Arab region and Arica.

as a result, the global jobs crisis has entered a new,more structural phase.

his is not a normal employment slowdown. Four years into the global crisislabour market imbalances are becoming more structural and thereore more di-cult to eradicate. Certain groups such as the long-term unemployed are at risk oexclusion rom the labour market. Tis means that they would be unable to obtainnew employment even i there were a strong recovery.

In addition or a growing proportion o workers who do have a job employ-ment has become more unstable or precarious. In advanced economies involuntary

part-time employment and temporary employment have increased in two-thirdsand more than hal o these economies respectively. Te share o inormal employ-ment remains high standing at more than per cent in two-thirds o emerging

Editorial

How to move out

of the austerity trap?Raymond TorresDirectorInternational Institute or Labour Studies


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World of Work Report 2012: Better jobs for a better economy

and developing countries or which data are available. Women and youth are dis-proportionately aected by unemployment and job precariousness. In particularyouth unemployment rates have increased in about per cent o advanced econ-omies and in two-thirds o developing economies.

Job instability is above all a human tragedy or workers and their amilies;but it also entails a waste o productive capacity as skills tend to be lost as a result

o excessive rotation between jobs and long periods o unemployment or inactivity.More job instability thereore means weaker productivity gains in the uture andless room or prospering and moving up the career ladder.

he jobs deicit is going hand-in-hand with a prolonged investment de-icit another sign that the crisis has entered a new phase. Te amount o unin-vested cash in the accounts o large irms has reached unprecedented levels(Chapter ) while in the case o advanced economies small rms continue to havediculty accessing credit that would allow them to invest and create jobs. Impor-tantly the Report nds that investment has become more volatile and that thishas exacerbated job precariousness in advanced economies as well as in emergingand developing ones.

Finally society is becoming increasingly anxious about the lack o decent jobs.In out o countries the Social Unrest Index developed or the purposes othis Report increased in compared to . Europe the Middle East NorthArica and sub-Saharan Arica show the most heightened risk o social unrest. Onaverage Latin America where there has been a degree o employment recoveryand in a ew cases improvements in job quality has experienced a decline in therisk o social unrest.

The worsening situation reects the austerity trap

in advanced economies, primarily in Europe

Since and despite the job-riendly statements in successive G meetingsand other global orums the policy strategy has shied its ocus away rom jobcreation and improvement and concentrated instead on cutting scal decits atall costs. In European countries cutting scal decits has been deemed essentialor calming nancial markets. But even in countries which have not suered romthe eects o the crisis this remedy is being applied or pre-emptive reasons scaldecits are being reduced to avert any negative reactions rom nancial markets.Tis approach was intended to pave the way or greater investment and growthalong with lower scal decits.

In addition as part o the policy shi the majority o advanced economies

have relaxed employment regulations and weakened labour market institutions(Chapter ) and more deregulation measures have been announced. Tese stepsare being taken in the hope that nancial markets will react positively therebyboosting condence growth and job creation.

However these expectations have not been met. In countries that havepursued austerity and deregulation to the greatest extent principally those inSouthern Europe economic and employment growth have continued to deterio-rate. Te measures also ailed to stabilize scal positions in many instances. Teundamental reason or these ailures is that these policies implemented in a con-text o limited demand prospects and with the added complication o a banking

system in the throes o its deleveraging process are unable to stimulate pri-vate investment. Te austerity trap has sprung. Austerity has in act resulted inweaker economic growth increased volatility and a worsening o banks balance


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Editorial

sheets leading to a urther contraction o credit lower investment and conse-quently more job losses. Ironically this has adversely aected government budgetsthus increasing the demands or urther austerity. It is a act that there has beenlittle improvement in scal decits in countries actively pursuing austerity policies(Chapter ).

With regard to deregulation policies the Report nds that they will ail to

boost growth and employment in the short term the key time horizon in a crisissituation. Indeed the employment eects o labour market reorms depend heavilyon the business cycle. In the ace o a recession less stringent regulation may leadto more redundancies without supporting job creation. Likewise the weakeningo collective bargaining is likely to provoke a downward spiral o wages therebydelaying recovery urther.

In general the Report conrms ndings rom earlier studies that show thereis no clear link between labour market reorms and employment levels. Interest-ingly within the range in which the majority o countries lie adequate employ-ment regulations tend to be positively associated with employment. Beyond thatbadly designed regulations may adversely aect labour market perormance. In

these cases there are grounds or considering reorms as part o social dialogue andin conjunction with social protection measures. Tis policy has been successullypursued in the recent past in countries such as Austria and Brazil.

but spreading to other countries.

Many emerging and developing countries pursued a strategy o boosting domesticdemand in order to compensate or weaker prospects or exporting to advancedeconomies. Tere are signs that in some o these countries such as India LatinAmerica South Arica and more recently China wages have grown to catch up

with productivity. Public investment and social protection have also been rein-orced and regional integration has proved helpul.Nevertheless even in these countries labour markets and real investment

are not immune to the global economic weakening. Volatile capital lows hasalso aggravated the instability o the real economy and the possibility or creatingbetter jobs.

It is thereore crucial to pursue urther the present approach o boostingdomestic demand complementing it with better enorcement o core labour stand-ards and measures to avoid destabilizing capital fows.

An alternative approach exists

It is possible to move away rom the austerity trap. Last years World o Work Reportoered a three-pronged approach which remains valid today. First labour marketinstitutions should be strengthened so that wages grow in line with productivitystarting in surplus economies. In the current situation consideration could begiven to a careul and coordinated increase in the minimum wage. Further eortsto implement core labour standards would also be helpul especially in emergingand developing countries where gaps exist. Ratiying ILO core Conventions in allG countries would give a positive signal in this respect.

Second it is critical to restore credit conditions and create a more avourable

business environment or small enterprises. Te issue is particularly pressing in theEuro-zone countries where the policy o the Central Bank to provide liquidity tobanks has ailed to boost credit to the real economy. Tere may also be a case or


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higher taxation o rms that do not reinvest prots and/or lower taxation o rmsthat emphasize investment and job creation.

Tird it is possible to promote employment while meeting scal goals. TeReport shows that a scally neutral change in the composition o expendituresand revenues would create between . and . million jobs within to years.In the case o emerging and developing countries eorts should be centred on

public investment and social protection to reduce poverty and income inequalityand to stimulate aggregate demand. For advanced economies the ocus should beon ensuring that unemployed people especially youth receive adequate supportto nd new jobs.

More undamentally it is high time or a move towards a growth- and job-orientated strategy. Tis would help to coordinate policies and avert urther conta-gion caused by scal austerity. In Europe the strategy could include a coordinatedapproach to solving the debt crisis or which innovative unding mechanisms andimproved utilization o European Structural Funds properly reormed in orderto better tackle present job decits would be instrumental.

which requires embracing the perception that job-friendly policieshave a positive effect on the economy and that the voice of nance

should not drive policy-making.

Te current policy approach refects the premise that growth ollows austerity andthat in turn jobs ollow growth. According to this view the main thrust o eortsto date has thereore ocused on cutting decits and restoring global growth topositive territory with the view that soon thereaer job creation would ollow. Asa consequence more direct eorts to stimulate job creation and boost the incomeso those most vulnerable to the crisis have been o secondary importance.

Since there are now indications that these premises have proved counterpro-ductive it is vital to demonstrate that an alternative job-centred approach out-lined above exists. It is also imperative to nurture this alternative approach withconcrete examples o policies that work in which ILO has played a key role viathe adoption o the Global Jobs Pact and could play a greater role as a orum orpolicy analysis.

Another actor at work has been the imbalance between the voice o the realeconomy and that o the nancial sector. Both are important but both need tobe heard. o remedy this consideration could rst be given to the creation onational employment and social observatories. Tis step could help to identiy anupper bound to the level o unemployment beyond which new measures will be

needed in much the same way as or infation or scal targets. Te task couldbe acilitated by the establishment o independent and authoritative observatoriesto monitor and orecast trends in the labour market which could be charged withproviding independent evaluations o the employment impact o policy proposals.Teir remit would be to orewarn governments against the adoption or continua-tion o policies that are unlikely to achieve the unemployment goals.

Second there is a strong case or establishing consultative national orumswhere economic and social policies are discussed by government and the socialpartners. Although outcomes will not be binding such consultations can provideimportant eedback to governments on the current state o the labour market and

outlook or unemployment. Te orum could also play a central role in collabo-rating and consulting with the national observatory or agency created to monitorand assess labour market developments and policy impacts.


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Finally national eorts to shi to policies that will ensure higher levels oemployment will be greatly acilitated by reorms in the governance o the globaleconomy. Te key objective o this reorm is to provide a high and stable levelo eective demand in the global economy. Tis will entail: (i) ensuring eectiveglobal coordination o economic policies to eliminate beggar-my-neighbourpolicies that lead to global imba lances and restrict potential global grow th;

(ii) removing the constant threat to global economic stability rom volatile andunregulated cross-border nancial fows; and (iii) developing coordinated macro-economic policies or dealing with uture global economic crises.

In short this Report calls or countries to put in place the necessary condi-tions or a dramatic shi in the current policy approach. It highlights the needor an approach that recognizes the importance o placing jobs at the top o thepolicy agenda and the need or coherence among macroeconomic employmentand social policies. Tis requires a signicant change in domestic and global gov-ernance which is a complex task. Tough the task is demanding even progressivesteps in this direction will be rewarded with better job prospects and a more e-cient economy.


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Editorial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

1. Employment, job quality and social implications

of the global crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Main ndings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A. Employment trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B. Job quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C. Impact o the crisis on poverty and income inequality . . . . . . . . . . . . . . . . . .

D. Better jobs or a better economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix A. Country groupings by income level . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix B. Determinants o non-standard employment:

An empirical analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix C. Te impact o crises on employment: An empirical analysis . .

Reerences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Employment protection and industrial relations:

Recent trends and labour market impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Main ndings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A. Labour market institutions: Overview o the literatureand recent trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B. Assessing the labour market eects o changes in employmentprotection regulations and collective bargaining . . . . . . . . . . . . . . . . . . . . . . . . .

Table of Contents


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C. Policy considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix A. Empirical analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix B. Recent changes in labour legislation

and collective bargaining. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reerences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Fiscal consolidation and employment growth . . . . . . . . . . . . . . . . . . . . . . . 59

Main ndings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A. Debt dynamics and ongoing scal consolidation eorts . . . . . . . . . . . . . . . . .

B. Employment eects o scal consolidation:Austerity versus socially-responsible approaches . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix A. Fiscal policy expenditure and revenue compositionand the eect on employment: An empirical analysis . . . . . . . .

Reerences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Investing in a sustainable recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Main ndings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A. Global investment and employment trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B. Drivers o investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C. Policy considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix A. Empirical analysis o investment dynamics . . . . . . . . . . . . . . . . . . . .

Reerences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recent publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105


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List of gures, tables and boxes by chapter

FIGURES

Chapter 1

Figure . Employment rates in the third quarters o and . . . .

Figure . Long-term unemployment and inactivity ratesthird quarters o and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Incidence o non-standard employment advanced economies

and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Incidence o precarious employment advanced economies

and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Inormal employment in developing economies . . . . . . . . . . . . . . . . Figure . New jobs created between and by wage quintile . . Figure . Employment rates and incidence o non-standard employment

changes between and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Poverty rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Income inequality pre-crisis and crisis . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Income share by income quintile . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Employment projections: Advanced economies . . . . . . . . . . . . . . . . Figure . Employment projections: Emerging economies . . . . . . . . . . . . . . . . . Figure . Employment projections: Developing economies . . . . . . . . . . . . . . . Figure . Change in the risk o social unrest between and . . .

Chapter 2

Figure . Main ndings o over studies on the labour marketeects o employment protection legislation . . . . . . . . . . . . . . . . . . . .

Figure . A global overview o changes in employment protectionlegislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Change in the employment protection legislation indexbetween / and / . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Proportion o workers covered by collective agreements . . . . . . . Figure . Employment protection legislation index and aggregate

employment rates: Standard assumption versus evidence-

based relationship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Relative strictness o labour legislation or regular contractswith respect to temporary contracts and incidenceo temporary employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Relationship between aggregate employmentand the employment protection legislation index . . . . . . . . . . . .

Figure . Coordination o wage bargaining and employment rate . . . . . . .

Chapter 3

Figure . Change in public debt and scal balance as a percentageo GDP between and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Composition o scal balances by country group . . . . . . . . . . . . . .


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Figure . Factors contributing to the reduction o expendituresand growth o revenues in advanced economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Percentage o countries that have introduced cutsin social security benets since . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Debt dynamic ollowing scal consolidation . . . . . . . . . . . . . . . . . . .

Figure . Number o jobs that would be created between and depending on dierent policy mix scenariosadvanced economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 4

Figure . Investment to GDP ratio . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Change in investment volatility

versus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Increased investment volatility associated

with lower job quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Years to investment and employment recoveryin previous crises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Employment and investment changes during selected economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Average annual investment growth by company size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Average annual investment growth by company size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure . Cash holdings and investment as a percentage o total assets

by rm size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Cash holdings and investment as percentage o total assets

by rm size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Investment uncertainty averages and standard deviation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Investment and employment impact o a reduction

in uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure . Public spending crowds in private investment . . . . . . . . . . . . . . . . .


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TABLES

Chapter 1

able B. Denitions and sources o variables usedin the regression analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

able B. Summary o the estimation o the determinantso non-standard employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

able B. Marginal eects o the determinantso non-standard employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

able B. Robustness tests o the estimation o the determinantso non-standard employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

able C. Denitions and sources o variables usedin the regression analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

able C. Regression results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . able C. Alternative estimators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 2able A. Summary o variables used in the empirical analysis . . . . . . . . . . . . able A. Empirical analysis o employment and investment . . . . . . . . . . . . . .

Chapter 3

able . Change in scal expenditures and revenues as a percentageo GDP by category between and . . . . . . . . . . . . . . . . . . . .

able A. Denitions and sources o variables usedin the regression analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

able A. Regression results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 4

able . Investment to GDP ratios . . . . . . . . . . . . . . . . . . . . . . . . . .

BOXES

Chapter 2

Box . Employment protection legislation and labour market dualityduring the crisis: Issues and considerations . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 3

Box . Public sector wages and social security policiesas scal consolidation measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 4

Box . A tale o two crises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Box . Growth and distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Box . Uncertainty measures and the VIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


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Main findings

c Global employment has not yet recovered rom the global crisis that erupted in. Te global employment rate at . per cent in is . percentagepoints lower than beore the crisis. Tis means that around million jobs aremissing relative to the pre-crisis situation.

c here are marked cross-country dierences in recent employment trends.Employment rates have recovered much aster in emerging and developingeconomies especially the latter where as a group they have surpassed the pre-crisis levels. By contrast employment rates remain subdued in many advancedeconomies and in Northern Arica.

c Despite the cross-country dierences there are general issues which have to beaddressed in order to ensure a sustainable job recovery in all countries. First in themajority o countries some groups such as youth and the long-term unemployedace considerable diiculties in obtaining employment. Youth unemploymentrates have increased in about per cent o advanced economies and in two-

thirds o the developing economies. On average more than per cent o job-seekers in advanced economies have been without work or more than one year.

c Second in many countries where employment growth has resumed jobs tend tobe provided on a short-term basis. Involuntary part-time work and temporaryemployment are on the increase in the majority o countries where employ-ment growth has resumed. Involuntary part-time employment and temporaryemployment have increased in respectively two-thirds o advanced economiesand more than hal o these economies. Te share o inormal employmentremains high standing at more than per cent in two-thirds o emergingand developing countries or which data are available. here are however

Employment,job quality andsocial implicationsof the global crisis*

* Tanks to the rends Unit o the Employment Sector or providing the global unemploymentprojections and Sameer K hatiwada (Institute) or the social unrest graph.


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some exceptions to these general patterns; in particular Austria BelgiumBrazil Chile Germany Indonesia Peru Poland Tailand and Uruguay haveincreased their employment rates without compromising on job quality.

c hird the crisis has led to an increase in poverty rates in hal o advancedeconomies and one-third o developing economies. Similarly inequality hasincreased in approximately one-hal o advanced economies and one-quarter o

emerging and developing economies. Inequalities have also widened in termso access to education ood land and credit.

c Fourth in out o countries the Social Unrest Index increased in compared to . Sub-Saharan Arica and the Middle East and North Aricashow the most heightened risk o social unrest. In several countries in Asia andLatin America where there has been employment recovery and in some casesimproved job quality have experienced a decline in the risk o social unrestbetween and .

c Projections indicate that on present trends employment in advanced economieswill not reach pre-crisis levels until late . Te current economic slowdown

has also aected employment prospects in emerging and developing economies.

Introduction

Four years on rom the onset o the global crisis the employment rate or the globallabour market is still below the pre-crisis peak (ILO ). Recent trends suggestthat the labour market recovery has been weak in many o the advanced econ-omies. Employment growth in developing economies has shown a correspondingdecline as economic growth has slowed down. Te decline in demand rom the

Eurozone area has potential consequences that may spill over into other regionsthrough trade and nancial linkages i there is no boost in internal demand indeveloping economies (UNDESA ).

Beyond these general trends this chapter provides an in-depth examination othe proound impact which the prolonged period o economic turbulence has hadon labour markets. Te chapter examines its impact on employment long-termunemployment and labour market inactivity (section A) as well as job quality (sec-tion B) and poverty and income inequality trends (section C). Finally the chapterpresents employment projections and introduces the rest o the report (section D).

A. Employment trends

In the past year the employment recovery has been slower in advanced economies(. per cent) than in developing economies (. per cent). Te recovery is mar-ginal in advanced economies compared to the crisis period () duringwhich it declined by . per cent. Developing economies in contrast experienceda slowdown in their employment growth by more than one percentage point com-pared to the crisis period (. per cent).

Labour markets have not recovered from the global crisis

Despite an improvement in the past year labour markets have not recovered romthe global crisis and there is an overall decline in employment growth in advanced


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1. Employment, job quality and social implications of the global crisis

economies by . per cent or the period . For countries with availableinormation employment rates have increased since only in six (AustriaGermany Israel Luxembourg Malta and Poland) o the advanced economies( per cent) and in per cent ( out o countries) o the developing econ-omies (see Figure . panels A and B). Some o the developing countries in theLatin American region (Chile Colombia and Uruguay) were able to increase theiremployment rates by more than three percentage points while in others the rate

remained below the peak. In the developing economies the growth spurtdriven by domestic demand on both the consumption and investment side andrising real wages have actually helped many o these economies to register increases

0

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tia

Greece

Ita

ly

Hungary

Spa

in

Be

lgium

Slova

kia

Ire

lan

d

France

Portuga

l

Sloven

ia

Czec

hRepu

blic

Es

ton

ia

Ta

iwan,

China

Japan

Un

ite

dKing

dom

Un

ite

dStates

Cyprus

Barba

dos

Korea,

Rep.

of

Denmark

Worl

d

Finlan

d

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therlan

ds

Aus

tra

lia

Cana

da

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Zea

lan

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Swe

den

Norway

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Ma

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bourg

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Aus

tria

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tvia

Ecua

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la,

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ine

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tBan

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Chile

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bia

Paraguay

Philipp

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Uruguay

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Kaza

khs

tan

Tha

ilan

d

Countries whereemployment rates

increased

Countries where employment rates decreased

Countries whereemployment rates

increased

Countries where employment rates decreased

Panel A. Advanced economies

Figure 1.1 Employment rates in the third quarters of 2007 and 2011 (percentages)

Panel B. Emerging and developing economies

Note: For Argentina, Israel and Sri Lanka the data refers to Q2 and for Morocco and Uruguay the data refers to Q1.

World refers to global employment rates estimated for the baseline scenario from ILO, 2012.

Source: IILS estimates based on Eurostat, OECD employment database and national sources.


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in employment. Among the advanced economies Germany was able to increaseemployment largely due to the Kurzarbeit scheme.

there is a widespread deterioration in youth unemployment

In addition to unsatisactory employment outcomes in the majority o advanced

economies labour markets have deteriorated since in terms o unemploymentand inactivity. Unemployment has been particularly widespread among vulnerablegroups especially youth (aged -). Youth unemployment rates have increasedin about per cent o the advanced and two-thirds o the developing economieswith available inormation. In addition in hal o the advanced economies youthunemployment is higher than per cent. Although there was a temporary respitein the unemployment rate among adults in the situation did not improve orthe unemployed youth (ILO ). In the Middle East and North Arican regionyouth unemployment was our times greater than adult unemployment (ILO )and the rates were as high as per cent. Although some countries that improvedtheir employment situation mainly Austria and Germany were also able to reduce

their youth unemployment rates in some others it escalated to per cent in coun-tries such as Spain and Greece. In particular the youth unemployment rate in Spainhas increased by percentage points (rom to . per cent) since .

Across age groups the long-term unemployment rate has increased by morethan ve percentage points among adults in advanced economies. Te long-term un-employment rate has seen its greatest increase among youth since (Figure .panel C) and inactivity rates have also increased among youth (Figure . panel D).Tis has huge economic costs in terms o loss o skills and motivation and couldlead to human capital depreciation. Tere may also be accompanying social impli-cations in terms o increased social strie riots illness and so orth.

long-term unemployment continues to increase in advanced economies

Globally long-term unemployment rates have increased much more in advancedeconomies compared to developing economies (Figure . panel A). In hal o theadvanced economies more than per cent o the unemployed are long-termthat is unemployed or more than months. Te long-term unemployment ratehas increased most signicantly in Denmark Ireland Spain the United Kingdomand the United States since . he presence o a large proportion o long-term unemployed could result in huge economic and social costs. In some o thecountries where the long-term unemployment rate declined such as the Czech

Republic Finland Greece Netherlands Portugal and Slovenia inactivity ratesactually increased. Tis could imply that many o the long-term unemployed arealready exiting the labour market. Countries such as Australia and Germany hada comparatively small increase in long-term unemployment.

In comparison in the majority o the developing economies with availableinormation there is a decline in both long-term unemployment rates and inac-tivity rates (see Figure . panels A and B). Tis could be seen as a result o labourmoving into inormal employment to secure access to an income given the absenceo unemployment benets in these economies.

. Kurzarbeitreers to short-work or reduced working hours in Germany wherein companiesenter into an agreement to avoid lay-os o their employees to reduce the working hours o all or mosto their employees with the government taking up the responsibility o some employees lost income.


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and there is a major slowdown under way.

As observed earlier most countries have not recovered rom the global crisis andshort-term trends indicate a urther slowdown in the labour market recovery. Forthe time being employment rates have continued to improve in several LatinAmerican countries like Argentina Brazil and Mexico as well as in Indonesiathe Russian Federation and urkey. In other countries or which recent statisticsexist employment rates have tended to stagnate or have double-dipped such as

in the China EU India and Saudi Arabia.

B. Job quality

As discussed in the preceding section advanced economies are still ar below their peak and unemployment rates have continued to increase in almost all thecountries in the group. However there is little empirical evidence about the qualityo jobs that have been created since the crisis. Tis section addresses the issue o job

quality which is a multi-dimensional concept including dierent attributes anddimensions o work and employment. In the literature these dierent dimensionso job quality are identied as labour compensation power relations contractual

Panel A. Long-term unemployment rates Panel B. Inactivity rates

Panel B. Long-term unemployment rates by age-group Panel D. Inactivity rates by age-group

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Advanced

Advanced Advanced

AdvancedDeveloping Developing

1524 2549 5074 1524 2549 5074

Note: Long-term unemployment rates refer to the number of jobseekers who have been looking for work for over one

year, as a share of the total number of jobseekers. Inactivity rates are calculated as the number of persons of working

age who do not work as a per cent of the total number of persons of working age.


Figure 1.2 Long-term unemployment and inactivity rates,

third quarters of 2007 and 2011 (percentages)


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status and stability o employment working time etc. (see Muoz de Bustillo andde Pedraza () or details o the dierent perspectives).2 All these aspects oemployment quality have a potential impact on the well-being o the workers andtheir career development. Te issue o job quality is addressed below by taking intoaccount only three dimensions: rst the contractual status and stability o employ-ment; second the willingness to continue in a particular employment status; and

third labour compensation that is wages. All three dimensions combined actu-ally refect the quality o employment.Te rst dimension o job quality considers the contractual status and sta-

bility o employment that is standard and non-standard jobs in advanced econ-omies or ormal and inormal employment in developing economies. Non-standardjobs comprise part-time or temporary employment or sel-employed own account.Inormal employment comprises workers in small enterprises o ewer than veworkers sel-employed own-account workers unpaid amily helpers and workerswith no proper contract in the ormal sector. Tis indicator determines the qualityo jobs created whether they are standard or non-standard ormal or inormal.

Te second dimension examines the willingness o part-time or temporary

workers to remain in their job and this analysis is largely conned to advancedeconomies. Eurostat data provides inormation to dierentiate between volun-tary and involuntary part-time or temporary work. Involuntary work is denedas those workers who are engaged in these orms o employment because theycannot nd either ull-time or permanent jobs. As the workers are in these ormso employment not out o their choice but due to compulsion so they are reerredas precarious workers.3 Te third dimension examines the wages o the workersin assessing job quality or a sample o advanced and developing economies.

Non-standard employment has tended to increase or has remained high

Since the onset o the global crisis part-time employment has increased in two-thirds o the advanced countries (Figure . panel A) and temporary employmenthas increased in one-hal o the countries (Figure . panel B). Te increase in non-standard orms o employment is a phenomenon which was already widely knownbeore the current crisis (Houseman and Osawa ). Te World o Work Report2008 (ILO ) showed that the incidence o part-time and temporary employ-ment has increased over the past two decades. In many countries much o theslow recovery in employment has been accompanied by an increase in part-time ortemporary employment between and . Tis is despite the act that mucho the employment loss in the beginning o the crisis was the result o dismissal

o temporary and part-time workers. For example Spain along with Poland con-tinues to have the highest proportion o temporary employment in Europe ( percent) despite signicant losses o temporary employment during the crisis.

A proportion o the increase in non-standard employment in advanced econ-omies could be o a precarious nature that is involuntary part-time and temporary

. Appendix B presents an analysis o the determinants o non-standard employment.. Precarious work has the ollowing characteristics in the literature: low wages (at or below minimum

wage i it exists) uncertainty and insecurity (in terms o hours o work earnings multiple possibleemployers tasks to perorm or duration o the employment relation) lack o protection (romtermination o employment o access to social protection and standard non-wage employment benets:

sick leave domestic leave or parental leave) no explicit or implicit contract or lack o or limited accessto exercise union and work rights (Kalleberg ; ucker ). However due to lack o data onthese various dimensions we restrict our analysis only to involuntary part-time and temporary workers.


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employment. he share o involuntary part-time and temporary employment

increased in the majority o the advanced countries (Figure . panels A and B).In the share o involuntary part-time and temporary employees accountedor more than and per cent o part-time and temporary employees respec-tively and these shares have increased to and per cent in or the EUas a whole. Te creation o precarious employment has also led to a decline in un-employment rate in some o the countries.

Precarious employment (both involuntary part-time and temporary) declinedin Austria Belgium and Germany while in Eastern and Southern European coun-tries it increased during the crisis (Figure . panel A and B). In Greece Italy andSpain involuntary part-time employment is relatively high approximately per

cent in ; and involuntary temporary employment topped the per cent levelin Greece Portugal and Spain. A comparison o involuntary part-time and temp-orary employment beore the crisis (taken as an average between and )

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Poland

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Israel

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Korea,

Rep.of

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Korea,

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CzechRepublic

Ireland

Greece

Austria

Hungary

Cyprus

Switzerland

Canada

Germany

Portugal

Countries where part-time employment increased

Countries where

part-time employmentdecreased

Countries where temporary employment increasedCountries where temporary employment decreased

Panel A. Part-time employment (percentage of total employment)

Figure 1.3 Incidence of non-standard employment, advanced economies, 2007 and 2010

Panel B. Temporary employment (percentage of total employment)

Note: Grey bar denotes countries where employment rates increased.


2007 2010

2007 2010


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and in shows that the increase in involuntary part-time and temporaryemployment has been larger than the increase in unemployed and permanent jobssince the crisis. Tis clearly shows that during the crisis more precarious employ-ment was created.

and informal employment remaining signicant in most developing

countries for which data exist.

Te incidence o inormal employment remains high at over per cent o non-agricultural employment in two-thirds o the countries or which data is avail-

able (Figure .). In about per cent o the countries inormal employmenthas remained stable or has marginally declined since the beginning o the crisis.Inormal employment provides a reuge or the underemployed and also presents

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Austria

Belgium

Poland

Germany

Bulgaria

Netherlands

Norway

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Luxembourg

RussianFederation

CzechRepublic

Denmark

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UnitedKingdom

Malta

Estonia

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Zealand

Sweden

Finland

Slovakia

Canada

Portugal

Cyprus

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Japan

France

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Lithuania

Latvia

Romania

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Italy

Greece

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CzechRepublic

Lithuania

Latvia

Bulgaria

Slovakia

Poland

Romania

Portugal

Greece

Spain

Cyprus

Panel A. Involuntary part-time employment (percentage of part-time employment)

Figure 1.4 Incidence of precarious employment, advanced economies, 2007 and 2010

Panel B. Involuntary temporary employment (percentage of temporary employment)

Note: Grey bar denotes countries where employment rates increased.


2007 2010 Countries where the share of involuntary part-time employment increasedCountries wherethe share ofinvoluntarypart-time

employmentdecreased

2007 2010Countries where the share of involuntary

temporary employment decreasedCountries where

the share ofinvoluntarytemporary

employmentincreased


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possibilities or raising amilies out o poverty. Tere is some evidence that time-related underemployment4 reduced marginally in some o the Latin American

countries (Argentina Brazil Chile Colombia Ecuador Mexico Peru and Uru-guay) (ECLAC ). Similarly in the Asian region the implementation o theNational Rural Employment Guarantee Scheme in India has reduced underem-ployment while boosting employment opportunities and wages in rural areas (Raniand Belser orthcoming). In Sri Lanka underemployment has declined by . per-centage points between and (Ministry o Finance and Planning ).

Wages paid to temporary workers are comparatively low

Te wages paid to workers in non-standard employment are comparatively low.Te World o Work Report 2008 (ILO ) showed that in European coun-

tries workers on xed-term contracts are paid less than permanent employees.An analysis o temporary contracts in nine countries (advanced and developing)shows that temporary workers are paid about per cent less than permanentworkers in a number o countries.5 Earlier empirical evidence also shows that xed-term jobs pay less than permanent ones even aer controlling or other individualcharacteristics (Stancanelli ; Amuedo-Dorantes and Serrano-Padial ).During the present crisis this tendency has become widespread in many countries.Te phenomenon was also observed in many developing countries where data was

. Te time-related underemployment denition is rom ECLAC. It is dened as involuntarilyworking less than the normal duration o work determined or a given activity.

. Te countries where wages are per cent lower are Germany Mexico South Arica and Spainand the analysis is based on ijdens et al () wage indicator dataset. Please contact the authors ormore details about the analysis.

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thAfrica

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taRica

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Figure 1.5 Informal employment in developing economies(percentage of total non-agricultural employment)

Pre-crisis Crisis Countries where informalemployment increased

Nosignificantchange

Countries where informalemployment decreased

Note: For Pakistan, Russian Federation, Turkey and Ukraine the figures represent only employment in the informal sector (it excludes

workers with no proper contracts in the formal sector) and for all other countries the figures are estimates of informal employment.

Grey bar denotes countries where employment rates increased.

Source: The estimates for Latin American countries are from Panorama Laboral (2011); data for Zambia, South Africa, Turkey,

Republic of Moldova, Russian Federation, Ukraine, Sri Lanka and Thailand were compiled by the ILO Statistics Department and

are published in Vanek et al. (forthcoming). Data for India, Indonesia and Pakistan are estimates by IILS from national sources.


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available where inormal jobs were paid at less than per cent o the rate orormal jobs and the wage gaps were widening urther (ILO ).

and new jobs created tend to entail relatively low wages.

An examination o the nature o jobs created between and in the

countries or which data exist shows rst that the majority o new jobs are remu-nerated at a rate below average wages. Tis is particularly the case in ArgentinaMexico Netherlands South Arica and Spain. Second the analysis shows thatnew low-paid jobs are less stable than is the case with new highly-paid jobs. Againthere are cross-country dierences such as in Sweden and Netherlands most othe new jobs are in lower quintiles and these are concentrated in agriculture con-struction wholesale and retail trade accommodation and ood while the jobs inthe upper quintiles are concentrated in inormation real estate and nancial sec-tors. In comparison in the Russian Federation the new jobs are equally distributedacross the quintiles and jobs in manuacturing and construction sectors are preva-lent in all quintiles. Te new jobs in lower quintiles are predominantly in accom-

modation and ood and in the upper quintiles they are concentrated in miningnance real estate inormation and communication and proessional and scien-tic sectors.

An attempt is also made to analyse the new jobs created between and in order to account or permanent and temporary contracts. It emerges thatthe distribution o permanent contracts between wage quintiles is more homoge-nous compared to the temporary jobs which are unevenly distributed towards thelower wage quintiles (see Figure .).

There is signicant cross-country heterogeneity

in the quantity and quality of new jobs created.

In order to deepen the preceding analysis o the nature o new jobs created coun-tries have been grouped into our categories depending on their aggregate employ-ment record since and whether the incidence o non-standard employmentincreased or not since (see Figure .). For the purpose o the analysis non-standard employment includes temporary employment or precarious workers(involuntary part-time and temporary employment) or advanced countries andinormal employment or developing countries.

Category consists o countries where employment rates have increased since

and the incidence o non-standard employment has decreased (see Figure .category ). Tis group comprises Austria Belgium Brazil Chile Germany Indo-nesia Peru Poland Tailand Paraguay and Uruguay.

Category consists o countries where employment rates increased com-pared to levels and the incidence o non-standard employment increased(see Figure . category ). Tis group comprises Colombia Luxembourg Maltaurkey and Ukraine.

Category consists o countries where employment rates decreased comparedto levels and the incidence o non-standard employment also decreased (seeFigure . category ). Tis shows that the impact o the crisis on job quality can

actually be mixed as it is usually the worst jobs that are lost rst resulting in animprovement in

Informe Sobre El Trabajo en El Mundo 2012

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