A UNITED NATIONS agency has criticised austerity measures, saying that in their current form they are hampering economic growth and job creation.
‘World of work report 2012’ by the International Labour Organization (ILO) described the global employment situation as alarming.
It says that around 50 million jobs which had existed before the economic crisis are no longer around, and that the pursuit of austerity measures by many governments especially in advanced economies is having a devastating impact on the job market.
The ILO also says that austerity has failed to reduce fiscal deficits and the measures have “to a large extent been counter-productive” – and could actually lead to another recession.
“The narrow focus of many Eurozone countries on fiscal austerity is deepening the jobs crisis and could even lead to another recession in Europe”, said Mr. Raymond Torres, director of the ILO Institute for International Labour Studies and lead author of the report. He added:
Countries that have chosen job-centred macroeconomic policies have achieved better economic and social outcomes. Many of them have also become more competitive and have weathered the crisis better than those that followed the austerity path. We can look carefully at the experience of those countries and draw lessons.
Many jobseekers in developed economies are becoming demoralised and losing skills, the ILO warned, while it credited Brazil, Indonesia and Uruguay with improving employment levels and the quality of that employment through well-designed employment and social policies.
“Globally, long-term unemployment rates have increased much more in advanced economies compared to developing economies,” the report says. “In half of the advanced economies, more than 40 per cent of the unemployed are long-term, that is unemployed for more than 12 months. The long-term unemployment rate has increased most significantly in Denmark, Ireland, Spain, the United Kingdom and the United States since 2007.”
“The presence of a large proportion of longterm unemployed could result in huge economic and social costs,” it warns.
The report recommends job stimulus and social policies to reach employment targets, saying that fiscal stability “should not be an end in itself but the means to achieve a quicker and more equitable economic and labour market recovery”.