World ‘On Verge Of New Recession’
A prominent UN agency has issued a warning that the globe is hurtling toward a long recession, a 40 million worldwide job shortage and an increase in large scale social unrest.
In a report published today, the International Labour Organisation (ILO) warns that the world faces an imminent “dramatic downturn” in employment and urges the G20 to act to “soften the impact”.
Outlining that the globe faces a “new and deeper jobs recession”, the report, titled World of Work Report 2011: Making Markets Work for Jobs, warns that job creation is slowing and worldwide unemployment stands at a record of more than 200m.
“We estimate that for the next two years, the world economy would need 80 million jobs to bring the unemployment rate down to what it was before the crisis” in 2007, said Raymond Torres, who heads the ILO’s research institute.
Adding that the “world economy would create just 40 million jobs,” in that time, the report estimates that at current trend levels it will take at least five years to return employment in advanced economies to pre-crisis levels.
Of those 40 million newly created jobs, the ILO states that just 2.5 million will be created in advanced economies, leaving a shortage of 24.7 million jobs in industrialised states during 2012 and 2013.
The ILO also warned that the number of people out of work in the euro zone rose to 16.2 million in September, the highest level since records began in 1998.
The upshot of such massive shortages in employment will, according to the ILO, result in greater social unrest in 45 different countries.
“This is especially the case in advanced economies, notably the EU, the Arab region and to a lesser extent, Asia,” it said.
The report pinpoints the greatest risk of social unrest to Greece, Portugal, Spain, Estonia, France, Slovenia and Ireland.
Without counter-measures, the crisis will likely unleash a recession that could last a decade or more, the report adds.
Increasing labour market spending by half a% of gross domestic product would increase employment by between 0.4% and 0.8%, depending on the country, the ILO said.
“We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment,” said Torres.