As the world economy hovers on the brink of a nasty, brutish and prolonged slump, the ranks of the jobless are set to multiply. According to an ‘optimistic’ scenario, the number of unemployed across the world will rise by 18 million people in 2009 in comparison with the figure for 2007. This may rise by 30 million if it takes more time for matters to stabilise.
In the worst case, a rise of 50 million is a possibility if growth should slow more rapidly this year and recovery is delayed unto 2010, according to the International Labour Organisation’s (ILO) latest Global Employment Trends. These are truly dismal tidings as the ILO recognises that the unprecedented economic stimulus packages announced by various governments to boost growth will take time to have an effect. The crisis will only worsen before it gets better.
The epicentre of global joblessness is, of course, the developed economies that are widely expected to experience negative growth this year. But this spectre haunts the developing world as well. The severe downturn is expected to result in a sharp rise in working poverty and vulnerable employment. The latter includes contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship.
According to the ILO’s worst case scenario, the number of working poor — people who are unable to earn enough to lift themselves and their families above the $2 per person, per day — may rise to 1.4 billion, or 45 per cent of all the world’s employed. The proportion of people in vulnerable employment could reach a level of 53 per cent of the employed population.
This is, indeed, the sort of problem that confronts economies like India. Having grown at a rapid clip of 8.8 per cent per annum during the last five years, its growth is likely to slow down to 5-6 per cent. The economy, thus, will generate much fewer jobs to gainfully absorb the millions who seek work. If the adverse social impact is not to get out of hand, the policy imperatives clearly include provision of safety nets like unemployment relief and insurance for the working poor and vulnerable segments of the population.