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Contributions from
the Column
Studies and reports
Not enough drugs
Measuring aid impacts
Caused by ill-conceived political decisions
Preventive strikes ‘yes’, unilateral action ‘no’
Half the world’s workers
living below poverty line
01/2005 |
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[ World Employment Report 2004-2005 ]
Half the world’s workers
living below poverty lin
Half the world’s workers – some 1.4 billion people – are trapped in grinding poverty unable to earn enough to lift themselves and their families above the US$2 a day poverty line, but this figure could be reduced if policies zero in on improving labour productivity and creating jobs, says a new study by the International Labour Office (ILO). The ILO World Employment Report 2004-2005 states that focusing economic policies on creating decent and productive employment opportunities is vital for reducing global poverty as called for in the Millennium Development Goals (MDGs). “Women and men all over the world expect to get a fair chance at a decent job,” said ILO Director-General Juan Somavia. “Generating more and better jobs must become the central plank of the global drive to reduce poverty.”
The report also says that the 185.9 million people in the world who were unemployed in 2003 represent the “tip of the iceberg” of the decent work deficit, since more than seven times that number of people are employed but still live in poverty. According to the report, some 2.8 billion people were employed globally in 2003, more than ever before. However, of these, nearly 1.4 billion – the highest number ever – are living on less than the equivalent of US$2 a day and some 550 million are living on under the US$1 a day poverty line.
But the news is not all bad. The report shows that the actual percentage of working persons living under both the US$2 a day and US$1 poverty lines is lower today than in 1990, while projected global growth rates may halve US$1 working poverty in some areas of the world by the year 2015.
The report argues that the benefits of productivity gains start at the enterprise level, with lower costs of production and increased profits and competitiveness, and can continue through to benefit workers in the form of higher earnings and reduced working time. Ultimately these benefits impact the macro-economy with lower prices, increased consumption and increased employment. However, the report acknowledges that reality can be more complex, with major shifts in employment and earnings hidden behind average figures. Productivity gains can often lead to the downsizing of some sectors, with employment increases coming elsewhere. To deal with this challenge, “institutions should provide workers with security and training to better prepare them for the changing labour market.” In this context, upgrading the informal economy where most people work in many developing countries is vital.
The report outlines the importance of employment stability since it helps productivity growth. Employment “stability” is not “labour immobility”: jobs and skill requirements can change for the same person working for the same firm. In order to improve productivity, there is a need to balance the flexibility that firms require with protection for workers. According to the ILO, those regions that have managed to increase productivity in the longer run and have also managed to create employment opportunities are more likely to be on track to reach the Millennium Development Goal of halving poverty by 2015. (ILO)
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