GENEVA (ILO News), Thursday, 1 June 2006 - In a new analysis designed to stimulate debate on emerging trends and challenges in the world of work, the International Labour Office (ILO) says today's labour market is marked by a widening gap between unprecedented opportunity for some and growing uncertainty for many.
The report, entitled "Changing patterns in the world of work" */ and presented to the 95th International Labour Conference of the ILO for discussion here between 31 May and 16 June, describes recent trends and future prospects in what it calls an "emerging global labour market".
"Change provides welcome opportunities for more rewarding and satisfying work and a better life," the report says. "For others, change is worrisome, closing off rather than opening up chances for improving living and working conditions."
In the preface to the report, ILO Director-General Juan Somavia says, "There is a growing feeling that the dignity of work has been devalued; that it is seen by prevailing economic thinking as simply a factor of production - a commodity - forgetting the individual, family, community and national significance of human work. People are reacting in conversations at home, in the secrecy of the voting booth and, when necessary, by forcefully voicing their complaints in the streets."
The comprehensive survey of the global changes in the world of work draws on the ILO's large knowledge base of information on many aspects of the labour market. Among its findings:
- The global workforce is growing rapidly. Today, over 3 billion are either working or looking for work, a number that is expected to swell by over 430 million by 2015. Almost all these new entrants will come from developing countries.
- Hundreds of millions of new jobs will be needed over the next decade. Economies will have to create on average more than 43 million new jobs each year in order to reduce global unemployment, which reached 192 million people in 2005 - its highest level ever - up from 157 million in 1995.
- The impact of HIV/AIDS will be increasingly decisive in many countries. The epidemic, which hits people of working age hardest, is expected to cause an estimated total loss of some US$270 billion by the year 2020 in some 41 countries hardest hit by the disease.
- Women constitute 40 per cent of the labour force. From 1991 to 2005 the global female workforce increased from under 1 billion to 1.22 billion, but women still face many obstacles to equal integration in the labour market.
- During the last decade, youth employment rates increased globally from 12.1 to 13.7 per cent. In 2005, young people in developing regions were 3.3 times more likely to find themselves unemployed when compared to adult workers. In the developed world, youth were 2.3 times more likely to be unemployed than adults.
- In 2004, there were 218 million children trapped in child labour, representing a decrease of 11 per cent over the last four years.
- The number of people aged 60 years and over is growing faster than all other age groups. Labour force participation rates for women and men above 50 years of age have increased worldwide.
- The services sector went up as a share of global employment from 34.4 per cent in 1995 to nearly 39 per cent in 2005. This is close to the 40 per cent share of the agricultural sector. The industrial sector has a 21 per cent share.
"A major effort is needed to improve productivity, earnings and working conditions in order to reduce working poverty that affects nearly half of all the workers in the world," Mr. Somavia says. "We live in a time of opportunity and uncertainty in which some of the barriers that have prevented women and men from fully realizing their capabilities are coming down, but in which good jobs that provide the foundation of security to build better lives are increasingly difficult to find."
The report identifies four major forces that are interacting to drive change in workplaces and labour markets:
- the development imperative, stemming from the urgent need to reduce poverty and inequality within and among nations;
- a technological transformation imparted by the diffusion of new means of information processing and communications;
- an intensification of global competition following trade and financial liberalization as well as a dramatic reduction of transport and communication costs; and
- a shift in political thinking regarding labour markets.
"If we want to achieve the goal of decent work for all, it is vital to understand what is driving the process of change so that it can be shaped to yield more and better jobs for working women and men everywhere," the report says.
Trends in the global labour market identified by the report include: changes in the world labour force; shifts in employment due to the evolution of global production systems; skills shortages emerging worldwide; increasing international labour migration; growth of the informal economy; discrimination in employment and occupation; and growing pressures both for flexibility and security in the labour markets.
The report stresses that there is a major transformation in the world of work with the potential for creating opportunities for all working men and women to have a decent job. "Technological progress, if applied in ways that promote inclusion rather than exclusion," the report says, "could increase productivity and make material poverty history within a generation."
"The main means for ensuring an inclusive character to the growth of the global economy is the way in which work and labour markets are organized and governed. Recent history is however disturbing," says the report. "The employment intensity of growth has slipped back globally."
It also adds that there are three components of a strategy to reduce the world's decent work deficits: a more employment-intensive form of growth achieved by altering the incentive framework to favour labour rather than capital, especially in countries with large-scale underemployment and working poverty; an increase in the productivity of the world's poorest workers so as to enable an improvement in their earnings and working conditions; and a faster rate of overall growth, thus increasing the demand for labour and accelerating the shift of the world's poorest workers into more productive jobs.
Reviewing global trends in social security, the report highlights that "the economic reality is that the current working population essentially pays from their earnings for retirees" pensions and health care, whether through taxes on wages and a state transfer mechanism or through the dividends paid on investments in the companies for which they work". The report adds that the ratio of dependents to the working age population is beginning to rise in some developed countries and will start to increase at a rapid pace in a number of developing countries including China over the next 25 years.
In an analysis of the ways in which labour market governance is adapting and modernizing, the report also sees some common patterns. It suggests that the enormous variety of work and the required diversity of governance mechanisms need to be anchored within broadly accepted principles that are the foundations for laws, regulations and contracts. It finds that the ILO's international labour standards have an important and continuing influence on national labour laws. In some countries the focus is on rethinking existing arrangements built up over many years, but most face the challenge of developing legal systems that can extend the reach of labour laws into the informal economy.
*/ Changing patterns in the world of work", Report of the Director-General, International Labour Conference, 95th Session, 2006. Report I (C). International Labour Office, Geneva, 2006. ISBN 92-2-116623-6. www.ilo.org/public/english/standards/relm/ilc/ilc95/reports.htm