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Although there have recently been signs that economic growth is back on track in some parts of the world, the global employment situation is still alarming, says the International Labour Organization (ILO). It warned that job recovery in Europe is not expected until 2016 “unless there is a dramatic shift in policy direction.”
50 million jobs are still missing when compared to pre-recession times, according to the ILO’s World of Work Report 2012, which also warned that a new and more problematic phase of the global jobs crisis is emerging. Governmental shifts in advanced economies towards combining fiscal austerity and tough labour market reforms could have devastating consequences as these have failed to reduce fiscal deficits, the report says.
The ILO also claims that in most advanced economies, many of the new jobs are “precarious” as non-standard forms of employment are on the rise in 26 out of the 50 economies. This could also hinder job recovery, the ILO says. However, the report also acknowledges that “it is probable that countries with higher productivity will have a higher share of part-time or temporary work”.
But Mr. Raymond Torres, Director of the ILO Institute for International Labour Studies, criticised that the narrow focus of many Eurozone countries on fiscal austerity is “deepening the jobs crisis and could even lead to another recession in Europe.”
“Countries that have chosen job-centred macroeconomic policies have achieved better economic and social outcomes. Many of them have also become more competitive and have weathered the crisis better than those that followed the austerity path. We can look carefully at the experience of those countries and draw lessons,” he added.
The report warned that many jobseekers are demoralised and losing skills while small companies have limited access to credit, which in turn is depressing investment and preventing employment creation.
Since 2007 employment rates have only increased in 6 of the 36 advanced economies, including Austria, Germany, Israel, Luxembourg, Malta and Poland, the report showed.
The full report can be downloaded here.