Job creation and the Triple Crisis

The aftermath of the Global Financial Crisis strengthened international policy debate regarding high rates of joblessness. However prior to the crisis, a major policy commitment had emerged from the United Nations World Summit. The General Assembly;

‘resolve to make full and productive employment and decent work for all, including for women and young people, a central objective of our relevant national and international policies as well as our national development strategies, including poverty reduction strategies, as part of our efforts to achieve the Millennium Development Goals [MDGs]’ (UN 2005:12).

By 2007, the notion of full and productive employment and decent work for all was added as a specific target associated with the MDG to ‘eradicate extreme poverty and hunger’. Yet, the transformation of the 2007-2008 Global Financial Crisis (GFC) into a real economic crisis posed a major setback in achieving the 2015 development targets.

At the 2009 World Economic Forum Annual Meeting, Labour Leaders warned that full and productive employment and decent work for all would not be achieved by 2015. Solutions to the crisis which favour workers, youth, homeowners and the unemployed were recommended. It was argued that rising joblessness could be addressed by coordinated interest rate cuts, fiscal stimulus including expenditure on infrastructure, health care, education, and aged care, and also strengthening unemployment benefits, and tax and income measures to support the purchasing power of low income earners. A ‘Green New Deal’ was proposed to promote job creation vis-à-vis alternative energy development and conservation.

The policy directive was clearly on aggregate demand stimulus, using traditional multiplier effects to boost employment and wages, though it was mentioned that direct job creation schemes could be used to strengthen and support these measures where necessary. Notwithstanding this, fiscal stimulus has been undermined by the implementation of sound budgetary policy in the pursuit of long-term fiscal sustainability.

Labour market conditions have deteriorated significantly since the advent of the GFC. Global unemployment has risen by approximately 28 million. Falling participation rates indicate that 39 million have given up searching for work, and approximately 870 million working women and men are unable to earn enough to lift themselves and their families above the $US2 a day poverty line (ILO 2014).

Policymakers at the 2012 United Nations Conference on Sustainable Development stressed that jobs are an urgent global concern, particularly the ‘widespread deficits of available decent work opportunities, especially for young women and men’ (UN 2012:26).

The 2012 Conference outcome statement, entitled ‘The Future We Want’, emphasised the nexus between job creation, sustainable and inclusive development and poverty reduction. Yet job creation is ostensibly tied to ‘inclusive and equitable economic growth’. The report calls on government to enhance infrastructure investment and public works, and encourages private sector to contribute to decent work for all and job creation. The private sector’s motivation for doing so is unclear.

ILO (2014), however, argue that focusing on economic growth alone and expecting job creation to follow is not sufficient to provide productive and decent work for all. In fact, policymakers at the 2012 Conference were ‘encouraged by government initiatives to create jobs for poor people in restoring and managing natural resources and ecosystems…’ But specific direct job creation programs were not addressed.

With the MDGs set to expire in 2015, consultations on the post-2015 development goals are now underway. ILO (2014) maintain that ‘full and productive employment and decent work for all, including women and young people, is the most effective route out of poverty’ and should be an explicit objective of the post-2015 development agenda. ILO (2014) outline the virtues of job creation for sustainable development:

‘At the household level, a secure and fairly remunerated job is not only the best path to escape poverty, it can also transform poor people’s lives. The assurance of a more stable and predictable income stream for at least one of its members provides a household with some ability to plan for the future, to support investment in schooling for the children, to access health and credit services, and even for other members of the household to start and grow their business’.

Job creation is now a pressing issue, a top priority and a major challenge which almost all economies face.

Categories:

2014

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