National Policies Can Offset Impact of Joblessness, Report Reveals


 Abimbola Akosile

United Nations global finance partners have said trade and trade-related policies have a role to play not just in promoting growth and prosperity, but helping share that prosperity more widely around the world.

The finance partners said this while launching a report that calls on national governments to pursue policies that help those who might lose their jobs, one of the unintended consequences of trade integration, according to a UN release.

Economists from the World Trade Organisation (WTO), the International Monetary Fund (IMF) and the World Bank said trade leads to productivity gains and significant benefits for consumers, especially the poor, but can also be responsible for job displacement that must be addressed through sound domestic policies that can help the unemployed get back on their feet.

Economists from the three global organisations reflect in the report on the latter part of the 20th century, arguing that trade integration helped drive economic growth in advanced and developing economies through greater productivity, increased competition resulting in higher living standards and more choices and better prices for consumers.

“I recognise that there are very real concerns, but the answer is not to turn against trade, which would harm us all,” says the WTO Director-General Roberto Azevêdo. Looking back, “trade has had a very positive impact on the lives and livelihoods of many millions of people in recent decades,” he added.

The report notes that job losses in certain sectors or regions in advanced economies have resulted to a large extent from technological changes rather than from trade.

According to Azevêdo the “challenge before us is to support the workers of today and train the workers of tomorrow.”

The organisations called on national governments to pursue both “active” and “passive” labour market policies such as training programmes, job search assistance and wage insurance (a private insurance providing compensation if one is forced to move to a job with a lower salary) to facilitate reintegration of the unemployed back into the job market.

They also called on governments to stabilise unemployed working families with short term passive labour market programmes, such as unemployment benefits and income support until those who have lost their jobs can get back to work.

Effective education and skills policies will be essential in preparing workers for the changing demands of the modern economy, they added.

The report also called for further trade integration to strengthen global growth and advance an inclusive trading environment. It stressed that traditional areas such as agriculture need further attention, while sectors such as services, as well as digital trade, represent areas where further trade reform can make a particularly strong contribution to growth.

The UN International Labour Organisation (ILO) 2017 World Employment and Social Outlook report, which was released in January, found economic growth trends lagging behind employment needs and predicts both rising unemployment and worsening social inequality throughout 2017.

According to the report, global growth domestic product (GDP) growth reached a six-year low last year, well below the rate that was projected in 2015.

Forecasters continue to revise their 2017 predictions downwards and uncertainty about the global economy persists, generating worry among experts that the economy will be unable to employ a sufficient number of people and that growth will not lead to inclusive and shared benefits.

Throughout 2017, global unemployment is expected to rise by 3.4 million. The increase, while a modest 5.7 to 5.8 per cent, is due to deteriorating labour market conditions in emerging countries – particularly those in Latin America and the Caribbean. However, unemployment is expected to fall in developed countries – especially in Northern, Southern, and Western Europe, the United States, and Canada.

In addition, the figure of 1.4 billion people who are employed in vulnerable working conditions is not expected to decrease. That number represents 42 per cent of all employment for 2017.

“Almost one in two workers in emerging countries are in vulnerable forms of employment, rising to more than four in five workers in developing countries,” said Steven Tobin, ILO Senior Economist and lead author of the report. That statistic is even worse for emerging countries. Those living in Southern Asia and sub-Saharan Africa are facing the greatest risk.

While the number of people living in poverty has been declining in recent years, rates of progress have begun to slow and are expected to continue to diminish in 2017. In developing countries, the rate of poverty is actually increasing.

Since 2009, the percentage of the working-age population willing to migrate abroad for work has risen in almost every region in the world. That trend was most prominent in Latin America, the Caribbean, and Arab States.

The report also points out a number of social inequalities that are creating barriers to growth and prosperity. Gender gaps in particular are affecting the labour market. In Northern Africa, women in the labour force are twice as likely as men to be unemployed. That gap is wider still for women in Arab States. As a result of these and other social inequalities across a wide range of demographics, the ILO estimates that the risk of social unrest or discontent is growing in almost all regions.