UN labor agency warns global growth not creating jobs

by Bahattin Gonultas and Furkan Naci Top ANTALYA The growth rate of global economy, which is expected at around 3 percent in 2015 will not create enough jobs to bring down global unemployment, the head of the United Nations International Labor Organization (ILO) told Anadolu Agency at the G20 Summit meeting in Antalya on Saturday. ILO Director-General Guy Ryder told Anadolu Agency that the situation of employment for young people is even worse. "Every year 40 million young people come on to the market in the world. Every year just to stay where we are today we need to create 40 million jobs. We are not doing that. The situation for young people is even worse." Ryder said that if you are under 25 year-old you are three times more likely to be unemployed than other adults. "The young people are really suffering the consequences of this crisis," he said. According to Ryder, the G20 must continue to focus on this issue. "Since 2010, the focus has been more on growth and jobs. I think this is absolutely necessary. We see today what we call the jobs gap in G20 countries. The crisis has destroyed 15 million jobs. It is absolutely right G20 leaders focus the priority on promoting growth and jobs," he added. "Unfortunately, despite these very good intentions and approach, the situation is not improving. We have seen the latest growth estimations from the IMF and from OECD. Growth is actually slowing down. the global economy is around 3 percent growth. With 3 percent growth we will not create enough jobs to bring down global unemployment." Ryder said that the lack of quality job creation is limiting the potential of low-income countries. Ryder said: "If you look at the global figures, global unemployment now is just over 200 million. For the G20 it is 50 million more than pre-crisis level. In the world overall, it is 60 million lost jobs. We have to treat these numbers with little bit of caution. If you look at the developing world the poorer countries, you don’t measure the problem simply by unemployment. People need to work to survive. So they are underemployed working in the formal economy. They make a living. They are not unemployed, because they cannot be unemployed. They have to work. So we need to look at quality of jobs." "There are very many unemployed young people, 75 million nearly. If you look at unemployment in terms of underemployment and non-quality unemployment, here is the shocking figure; 43 percent of young people in the labor market are either unemployed or they are working in poverty. They are doing jobs that cannot lift them above poverty. It can mean many things. You don’t earn enough money that can bring you out of poverty. The other element of poverty is lack of health and safety at work. 2.3 million people die every year because of work. They die in accidents or they die because of diseases that they got at work. That’s another measure of quality." Ryder warned that if investment is not increased, the world will have more unemployment problems. "We can look for other policies than trying to treat symptoms of the disease. If we don’t kickstart investment and through investment move growth, we shouldn’t have illusions. We cannot solve the problem. Why are companies not investing? Two things. One is policy uncertainty. I don’t think enterprises have the confidence in the future, that they can find opportunities for investment, which will bring profit. We see available finance going into financial markets, like stock markets. There is a lot of liquidity. But it is not going into productive investment that can create jobs." Because the global economy is getting more and more unequal, demand in the economy is related to that inequality, Ryder said. "People do not have money in their pockets. If there are not people who will buy your goods and services, you will not invest. So we have a vicious circle of low and inadequate demand deterring investment. We are trapped," Ryder said. Ryder said that countries have to get macroeconomic policies in place that will get jobs and growth moving. "We cannot solve the youth unemployment problem if we don’t solve the general problem. We need educational systems that direct young people," Ryder said. Ryder said that Turkey needs to invest in education. "Turkey has a good growth rate," Ryder said. "But Turkey needs to think how to eliminate the participation gap. Cultural factors, education, social attitudes all need to be changed," Ryder said. Commenting on the minimum wage hike in Turkey which is planned by the incoming government, he said that it is very important part of labor market policy and economic policy. "There is inevitably a balance to be found. A balance between enterprises’ success and employment creation. If you set a minimum wage so high that inhibits job creation, then you are doing the opposite of what you are trying to do. If you set it too low, you have people in unacceptable working conditions and you are not doing the things that minimum wage can do in terms of demand and inequality...it is an extremely important debate. I hope Turkey will find a good solution." The ruling party promised before the Nov. 1 elections to raise the minimum wage by 30 percent from the current 1,000 Turkish liras ($353) per month. Ryder praised the Turkish G20 Presidency's emphasis on implementation. "I congratulate Turkey for putting emphasis on implementation as a priority." http://www.aa.com.tr/en