UNEMPLOYMENT / MAY. 29, 2014
version 2, draft 2

More Than Half of the Developing World’s Workers are in Vulnerable Employment

According to the International Labour Organisation’s World of Work Report 2014, more than half of the developing world’s workers (roughly 1.5 billion people) are trapped in vulnerable jobs, working for themselves or in unpaid family work. Despite several countries in the developing world investing in quality jobs and taking significant steps towards keeping pace with advanced economies, social challenges remain acute in most emerging and developing regions.  

Unlike wage earners, these workers are less likely to enjoy formal working arrangements and social protection such as health care or pensions as well as regular earnings. On the contrary, their employment status involves poor remuneration, low productivity and limited ability to invest in their family’s welfare and education. This is in turn a detrimental factor that prevents themselves and the generations to follow from growing and enjoying decent living standards.

Millions of Jobs are Needed over the Next Five Years

Meanwhile, the ILO (International Labor Organisation) underlines an urgent need for 200 million new jobs to catch up with the growing working-age population in developing countries. Without them, young people will be severely hit as youth unemployment rates exceed more than three times the unemployment rate for adults.

The highest youth unemployment rates are found in the Middle East and North Africa regions, where almost one in three young people are not able to find work. Interestingly, finding a job in these regions is even harder for women, with jobless rates nearly amounting to 45%.  

The ILO director general, Guy Ryder, noted: "Evidence presented in the report shows that such policies will not yield development unless accompanied by dedicated efforts to boost employment and decent work opportunities and tackle working poverty…In countries where it was implemented, such a policy shift not only helped development but also played a counter-cyclical role that helped attenuate the impacts of the financial crisis".

Countries That Invested in Quality Jobs Made Most Progress

According to facts presented in the report, in recent years, many low and medium-income countries as well as least developed countries have made considerable progress in terms of economic growth. Countries that have made the greatest investment in quality jobs from the early 2000s, saw their living standards improving more than in developing and emerging countries that made less effort in improving jobs.

The report refers to a remarkable reduction in working poverty. Since the early 2000s, the working poverty rate has reduced from half of the working population, down to a third - a relatively significant drop. Despite this drop though, 839 million workers in developing countries still earn less than $2 per day.

What’s more, countries that successfully implemented measures to reduce the incidence of vulnerable employment during the early 2000s experienced significant economic growth after 2007. The per capita growth in these countries was almost 3% per year between 2007 and 2012, around one percentage point higher than in countries making the least progress on reducing vulnerable employment

The ILO urges that decent work should be a central goal in the global development agenda after 2015, the expiry date for the millennium development goals. Raymond Torres, director of the ILO research department stated that "Economic growth is not sustainable when it is based on poor and unsafe working conditions, suppressed wages and rising working poverty and inequalities".

All in all, a significant portion of the developing world’s workers are trapped in the vicious circle of working poverty and vulnerable employment. Decent work opportunities should be equally distributed to men and women across all ages and social classes. On top of this, promoting social protection and formal employment conditions and other key labour principles are vital actions that can drive overall growth in the region. 

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