By the Blouin News Business staff

Today’s global jobs crisis

by in Global Economy.

A member of a group of job seekers and employees outside a cordoned-off job center in the Prenzlauer Berg district of Berlin, Germany. AFP/Getty Images

A member of a group of job seekers and employees outside a cordoned-off job center in the Prenzlauer Berg district of Berlin, Germany. AFP/Getty Images

We are living in a time of crisis: the lack of professional opportunities has created a global jobs catastrophe. Large employment gaps currently exist in most G20 countries and the quality of employment remains a big concern. Such a grim reality has intensified since the financial crisis. These are some of the issues three leading international institutions raised in a new report prepared for the G20 Labour and Employment Ministerial meeting, which will be held in Melbourne, Australia, tomorrow and the day after (10-11 September).

The International Labor Organization, the OECD and the World Bank believe that the G20 countries are still struggling, six years after the crisis began, both in terms of the quantity and the quality of employment. The report warns that with more than 100 million people still unemployed in the G20 economies and 447 million ‘working poor’ living on less than $2 a day in emerging G20 economies, the weak labor market performance is also threatening economic recovery because it is constraining both consumption and investment.

          Trends in employment and unemployment

The weak global economic growth observed since the financial crisis has been associated with even weaker employment growth in most G20 countries, so-called jobless growth, although with wide variations (Figure 1).

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Consequently large jobs gaps have persisted in several G20 countries. Despite some small improvement recently in several countries, the G20 jobs gap is projected to remain substantial until at least 2018, particularly in advanced G20 countries (Figure 2).

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In some countries, long-term unemployment has increased as a result of the duration of the jobs crisis (Figure 3).

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“We are seeing wage and income inequality widening in many G20 countries, and if the goal is stronger, sustained, and balanced growth then inequality cannot be ignored. Equally, the situation of young people who are out of work is acute, and countries that ignore their plight do so at their own peril. We know that can spark unrest which can in turn further disrupt unemployment and growth prospects. There is no magic formula to solve this jobs crisis but we do know that it requires a ‘whole of government’ approach, involving the active collaboration of many ministries,” said Nigel Twose, Senior Director for Jobs of the World Bank Group.

The problem is that the outlook remains bleak. As the report suggests, persistent slow growth will continue to dampen employment prospects. Still, stronger economic growth is a necessary but not sufficient requirement for strong job creation. Looking ahead, today’s substantial jobs gap will persist until at least 2018 unless growth gains momentum. Meanwhile, the global jobs crisis will only intensify.