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World — ILO warns against early exit from stimulus measures

08 December 2009
 

An 'early exit' from support measures adopted in response to the global economic crisis could postpone a jobs recovery for years and render the fledgling economic upturn 'fragile and incomplete', a new report by the research arm of the International Labour Organisation (ILO) says.

In a stark analysis of the impact of the global recession, the ILO's World of Work Report 2009: The Global Jobs Crisis and Beyond, also projected that unless adequate measures are adopted and in some cases continued, more than 40 million people could drop out of the labour market.

"Despite some initial signs of economic upturn and because of the significant rise in unemployment and in part time work, support measures should not be withdrawn too early" said Raymond Torres, Director of the ILO's International Institute for Labour Studies and lead author of the report.

"The global jobs crisis is not over," he added. "It is therefore crucial to avoid premature exit strategies. In short, the economic upturn will remain both fragile and incomplete as long as the jobs crisis continues. A real recovery will be achieved only when employment recovers."

The report also indicates most of the failures of the financial system that lie at the root of the present crisis have not been tackled so far – another reason why early exit would be premature.

ILO Director-General Mr. Juan Somavia stated "this report confirms that unless decisive measures to support employment are taken and sustained, genuine recovery with employment will be unnecessarily delayed. This crisis and the crisis before both illustrate the need to shift the policy paradigm to one centred on people’s needs for decent work."

The report also observes that bringing persons back into productive employment sooner would be less costly for the public purse than taking action later.

The ILO report says the length and scope of the jobs crisis could be reduced if stimulus measures and overall policies were focused on the approach of the ILO 'Global Jobs Pact' adopted earlier this year. The Pact presents an integrated portfolio of tried and tested policies that puts employment and social protection at the centre of crisis responses. It has received worldwide support at the highest political level, including by the United Nations and the G20, in the space of only a few months.

The report shows that a continuation of fiscal stimulus measures, if well focused on jobs, would raise employment by 7% compared to an early exit situation.
 
"Clearly, what we have on our hands is a situation that could become critical in the long–term unless we concentrate on promoting jobs and helping those who have lost theirs," Mr. Torres said. "This crisis is not just about people who have lost their jobs but also about people who have no options but to keep on looking for one."
 
To read the full report please click here

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