By Maximilian Clarke

The global economy is on the verge of a new and deeper employment recession that threatens widespread social unrest in ‘scores of countries’ unless swift action is taken, the International Labour Organization has warned.

At present, the new recession threatens to delay the jobs recovery by 5 years, leading to widespread and long-term gaps in the labour market. However, the Swiss-based organisation outline in their latest report, “World of Work Report 2011: Making markets work for jobs”, it is not too late for governments to take action to avert the worst of the second crisis.

“We have reached the moment of truth,” said Raymond Torres, Director of the ILO International Institute for Labour Studies that issued the report. “We have a brief window of opportunity to avoid a major double-dip in employment”.

Noting that the current labour market is already within the confines of the usual six-month lag between an economic slowdown and its impact on employment, the report indicates that 80 million jobs need to be created over the next two years to return to pre-crisis employment rates. However, the recent slowdown in growth suggests that the world economy is likely to create only half of the jobs needed.

The report also features a new “social unrest” index that shows levels of discontent over the lack of jobs and anger over perceptions that the burden of the crisis is not being shared fairly. It notes that in over 45 of the 118 countries examined, the risk of social unrest is rising. This is especially the case in advanced economies, notably the EU, the Arab region and to a lesser extent Asia. By contrast, there is a stagnant or lower risk of social unrest in Sub-Saharan Africa and Latin America.

The study shows that nearly two-thirds of advanced economies and half of emerging and developing economies with recent available data are once again experiencing a slowdown in employment. This comes on top of an already precarious employment situation in which global unemployment is at its highest point ever, surpassing 200 million worldwide.

The report cites three reasons why the ongoing economic slowdown may have a particularly strong impact on the employment panorama: first, compared to the start of the crisis, enterprises are now in a weaker position to retain workers; second, as pressure to adopt fiscal austerity measures mount, governments are less inclined to maintain or adopt new job- and income-support programmes; and third, countries are left to act in isolation due to lack of international policy coordination.

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