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January 27, 2003
World Unemployment Jumps to 180 Million
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January 27, 2003

Two years of economic slowdown have pushed the number of unemployed to new heights worldwide, with little prospect of any improvement in the global employment situation this year, according to a new report from the International Labor Office (ILO), a United Nations agency.

"The world employment situation is deteriorating dramatically," says Juan Somavia, director-general of the ILO. "While tens of millions of people join the ranks of the unemployed or the working poor, uncertain prospects for a global economic recovery make a reversal of this trend unlikely in 2003."

In the new study, the ILO estimates that the number of unemployed worldwide grew by 20 million since the year 2000 to reach a total of 180 million at the end of last year. In addition, the report says the weakness of labor markets has reversed recent reductions in "working poverty" achieved in the late 1990s.

Particularly hard hit are women and youth, who often have jobs that are particularly vulnerable to economic shocks, the report says. What's more, unemployed workers pushed into informal jobs in search of work faced even more uncertainty due to the sector's near lack of unemployment or social security coverage.

"This deteriorating world employment picture and the prospect of a weak or delayed recovery is very disturbing," Somavia says. "A continuation of these trends will dramatically increase the number of unemployed and working poor. A full-scale global recession could have grave consequences for the social and political stability of large parts of the world."

Among the major findings in the report:
  • At the end of 2002, the number of working poor, or workers living on $1 or less a day, resumed its upward trend, returning to the level of 550 million recorded in 1998;
  • While the global economic slowdown and post September 11 developments increased unemployment worldwide, Latin America and the Caribbean were hit hardest, with recorded joblessness rising to nearly 10 per cent;
  • To absorb new entrants into the labor market and reduce working poverty and unemployment, at least one billion new jobs are needed during the coming decade to get on track for the UN goal of halving extreme poverty by 2015.

Unemployment began to grow soon after the information and communication technology (ICT) bubble burst in spring 2001, sparking an economic slowdown. The aftermath of the September 11 attacks in New York and Washington, D.C. brought further shocks and amplified the economic downturn. This slower growth in industrialized nations meant job losses in the export-oriented industries of developing countries, according to the study. Worst hit were labor-intensive, export-oriented sectors, such as the garment industry which largely employ women.

Greater unemployment and poverty will place severe pressure on governments' budgetary targets, given the fragile financial position of many countries, the report says. Policy makers should focus on measures to secure and spread the recovery and ensure that faster growth yields the maximum number of decent work opportunities, reduces unemployment and poverty and restarts employment growth, according to the report.

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