If you thought the United States unemployment rate of 7.8 percent, or 12.2 million jobless Americans, was bad then look at the latest report from the International Labour Organization (ILO), a United Nations agency based in Geneva, Switzerland. It projects a really bad year for much of the world.
Since 2007 when the global economic collapse occurred, the number of unemployed workers around the world grew by 28 million people to 197 million out of work individuals. Last year, an additional four million people hit the unemployment line – one quarter of it coming from advanced nations.
The new report warns of an extra 5.1 million people becoming unemployed this year. That means the total of global unemployed workers will grow to 202 million people in 2013 and will surpass the 199 million jobless all-time record in 2009.
Looking to 2017, the ILO sees approximately 210.6 million people being out of work.
Akin to the U.S. government’s method of tracking unemployment figures, the ILO’s report doesn’t include the enormous number of those who have stopped searching for work and dropped out of the labor market completely (discouraged workers), which masks “the true extent of the jobs crisis.”
It noted the rising number of discouraged workers, who have made the decision to rely on a partner’s earnings or obtain welfare benefits from their respective governments.
“The labor market situation has been so bad for so long, discouragement has grown out of proportion,” it added.
The labor market doesn’t appear to be bright for the youth in the world. The global unemployment rate for youth is 12.6 percent, or 73.8 million young people. The figure is expected to grow by about half a million in 2014 and hit 12.9 percent in 2017.
Unemployment is having significant “marked effects” in East Asia, South Asia and Sub-Saharan Africa. Economic growth is also decelerating in China, India, Latin America and the Middle East, while the Euro region is suffering sovereign debt problems and failures in its financial sector.
Furthermore, the ILO found that investment levels have not recovered to pre-2007 levels in many parts of the world, which is mostly due in part to the uncertainty in public policy among federal governments. Wages have also remained sluggish, especially in developed countries. This has hurt consumer spending.
“Those regions that have managed to prevent a further increase in unemployment often have experienced a worsening in job quality, as vulnerable employment and the number of workers living below or very near the poverty line increased,” the 239-page report stated.
The study did foresee a job recovery in the future, but there would be a tremendous disparity in candidates’ skills and the demand of labor.
“New jobs that become available often require competences that the unemployed do not possess,” the report added. “Such skill and occupational mismatches will make the labour market react more slowly to any acceleration in activity over the medium run, unless supporting policies to re-skill and activate current job-seekers are enhanced.”