ILO predicts rise in global unemployment

The International Labour Organisation (ILO) released its latest “World Employment Report” last week in which it indicated worldwide unemployment was on the rise despite an increase in jobs in South East Asia and Latin American emerging markets. The ILO suggests that the global unemployment level has increased to 201.5 million (6% of the worldwide workforce). The report also suggested that the global unemployment level will reach 208 million by 2015.

Cause for concern

The effects of the global economic crisis are still being felt across many regions, particularly in the world's advanced economies. The ILO highlights particular concern for the rise in long term unemployment as well as deteriorating working conditions. “The shrinking middle-income groups in advanced economies is a concern not only for the integration capacity of companies but also for economic reasons. The long-term investment decisions by companies also depend on the presence of a large and stable middle class that is able to consume”, suggests Raymond Torres, Director of the International Institute for Labour Studies analysis.

Clear correlation between employment and investment

For the global employment rate to recover, the ILO stresses that companies must be encouraged to invest. While companies have regained the level of profits enjoyed prior to the beginning of the crisis in 2007, there are obvious signs of reluctance among companies to reinvest profit. The report points out that by reinvesting profits, companies can play a significant role in increased job creation.

Source: ILO, Tribune de Genève.