Five years after the outbreak of the global financial crisis, labor markets remain deeply depressed. Unemployment has started to rise again as the economic outlook worsens.
Global unemployment rose in 2012 after falling for two straight years and could further increase in 2013, the International Labour Organization (ILO) has warned in a new report.
A quarter of the increase in global unemployment in 2012 has been in the advanced economies, while three quarters has been through spillovers into other regions, with marked effects in developing economies in East Asia, South Asia and Sub Saharan Africa.
The number of unemployed worldwide rose by 4.2 million in 2012 to over 197 million, a 5.9 per cent unemployment rate, according to Global Employment Trends 2013.
“An uncertain economic outlook, and the inadequacy of policy to counter this, has weakened aggregate demand, holding back investment and hiring,” said ILO Director-General Guy Ryder. “This has prolonged the labour market slump in many countries, lowering job creation and increasing unemployment duration even in some countries that previously had low unemployment and dynamic labour markets.”
“Also, many of the new jobs require skills that jobseekers do not have,” he added. “Governments should step up efforts to support skills and retraining activities in order to address such mismatches which particularly affect young people.”
The report shows that global working poverty continues to drop, but at a slower rate than before the crisis. A middle-income working class is rising in the emerging world, which could provide additional stimulus for the global economy. But for the moment their purchasing power cannot compensate for slow growth in advanced countries. Looking at the medium-term, the forecast global economic recovery is not expected to be strong enough to bring down unemployment quickly, and the number of jobseekers is expected to rise to more than 210 million over the next five years.