Anxiety as global unemployment hits new heights
Despite global efforts aimed at stemming the tide of rising unemployment, the number of people that are unable to secure jobs continues to increase. Indeed, a report by the International Labour Organisation (ILO) tagged ‘World Employment and Social Outlook Trends’ (WESO), indicated that the population of the unemployed persons would swell by 2.5million this year.
The report showed that insufficient paid work affects almost half a billion people, adding that lack of decent work combined with rising unemployment, and persisting inequality make it increasingly difficult for people to build better lives through their work.
Already, the National Bureau of Statistics (NBS), had put Nigeria’s unemployment rate at 23.1 per cent as at the third quarter of 2018, which means the Federal Government’s target to get 100 million Nigerians out of poverty in 10 years may not be feasible in view of the ILO’s report.
As such, labour experts believe the ILO pronouncement has further brought to the fore the need for urgent and concerted efforts to address the unemployment crisis facing the nation.They argued that it is incontrovertible that majority of the unemployed are found in Africa, and the majority of the African unemployed are resident in Nigeria.
These dire predictions, they further argued, are anchored on the increasing levels of unemployment in Nigeria, not only worrisome is the high unemployment rate, but its level of acceleration with no buffers in sight compounds the situation.They maintained that the Nigerian Government and policymakers are seriously not paying adequate attention to creating platforms to tackle unemployment, rather, the nation’s socioeconomic space is experiencing constriction.
This, according to them, increases alienation and peripheralisation of a large percentage of the population, thereby denying them the opportunity to participate and contribute to national wealth creation efforts.From the report, the number of people unemployed globally stands at 188 million.
In addition, 165 million people do not have enough paid work, and 120 million have either given up actively searching for work or otherwise lack access to the labour market.In total, more than 470 million people worldwide are affected.The ILO said global unemployment has been roughly stable for the last nine years, but slowing global economic growth, which means that, as the global labour force increases, not enough new jobs are being generated to absorb new entrants into the labour market.
Earlier this month, a United Nations (UN) report on the economy showed that developed countries are experiencing slow growth, and some African countries are stagnating.
The consequence is that not enough new jobs are being created to absorb the growing labour force. In addition, many African countries are experiencing a drop in real incomes.For instance, Nigeria, which recently increased its minimum wage to N30,000 or less than $84/month, which in real terms is very much lower than the N18,000/($1 to N250) paid in 2015 because of inflationary trends and exchange rate, thus spiking poverty levels.
Director-General, ILO, Guy Ryder, noted that for millions of ordinary people, it is increasingly difficult to build better lives through such work. He said persisting and substantial work-related inequalities and exclusion are preventing them from finding decent work and better futures, stressing that it is extremely serious and has profound and worrying implications for social cohesion.
A former managing director of the defunct Diamond Bank turned politician, Alex Otti, in a recent piece published in Thisday Newspapers, said unemployment rate expected to increase to 33.5 per cent in the course of the year.
According to him, “Youth unemployment figures are even more scary as they are estimated to be over 60 per cent. “To put it graphically, about six Nigerians drop into the poverty basket every minute. “The number of people living below poverty line is chasing 100 million and that amounts to roughly half of the population.”Otti maintained that it is a no brainer that if the economy attracts more investments, jobs would be created, productivity would increase and the economy would do a lot better.
Speaking with The Guardian, a Lagos-based lawyer and expert on labour matters, Paul Omoijiade, said while there is a need to have proper legal framework, the cause of unemployment can be addressed holistically.
To get this right, he advised the issue of underemployment must also be addressed by tackling the trade sector.
Also, he urged the Ministry of Labour and Employment to tackle trade-related issues and provide supervisory roles to ensure that jobless youths are gainfully employed.
While calling for a quick review of the labour laws, he said the notion for hire and fire should be amended, saying: “In the advanced economies, it is easier to hire than to fire; it is difficult to terminate an employee without cogent reasons.“To manage the issue of unemployment, you need to professionalise the personnel management in most institutions, because we cannot do away with the human side of the enterprise, because human beings are the only thinking asset that you have; others are dummies. To that extent, you must ensure that the skills they have acquired are not thrown away just like that,” he said.
The Director-General, Nigeria Employers’ Consultative Association (NECA), Timothy Olawale, said the unemployment rate announced by the ILO is not surprising, given the global economic challenges and more importantly the economic recession that Nigeria witnessed few months ago.He said increasing unemployment with attendant negative consequences of insecurity and other social malaise have the potential to consume Nigeria if not urgently and deliberately addressed.
The reality, Olawale said, remains that the private sector has a major and critical role to play in solving the challenges of unemployment in Nigeria. With the right support and enabling environment, the Organised Private Sector (OPS) can help the country exit the dangerous trajectory of unemployment.
He maintained that as far as the formal sector is concerned, most Nigerian graduates are not employable, and therefore, do not possess the skills needed by employers of labour for formal employment.
He attributed this to the country’s education system, with its liberal bias, noting that the course contents of most tertiary institutions in Nigeria lack entrepreneurial contents that would have enabled graduates to become job creators rather than job seekers.
To resolve the challenges, Olawale called for increased investment in education and infrastructure “and ensure that skills align with the needs of Industry. These skills can either been exported or utilised within the country.
“Government should create an enabling environment for businesses to thrive, create wealth and expand, thus creating more jobs and employment for the masses or sub-businesses/contracts. A thriving private sector has the potential to create more jobs and wealth with consequential positive effects on the economy and Nigerians in general.
“Entrepreneurs should be encouraged to remain in business through rebates, friendly tax policies, and patronages by government and Nigerians. This would ensure job creation. Government should encourage and promote vocational and skill training; blue collars jobs should not suffer or be treated as inferior to white collars jobs,” he said.
Against this backdrop, President Muhammadu Buhari’s vision of lifting 100 million Nigerians out of poverty in the next 10 years is largely seen as a pipe dream backed with no concrete plan.
Deputy General Secretary, United Labour Congress (ULC), Chris Onyeka, who said there is always a direct proportionality between poverty and unemployment, noted that this explained Nigeria’s crisis of development, but also served as pointer to exiting the morass taken seriously.
He maintained that as long as such desires are not supported with actionable plans and programmes, including necessary policy direction, Buhari’s desire remained a wish list and a catalogue of intentions. “We had expected Mr. President to show us how he intends to achieve this lofty goals, but disappointedly, we did not see any support plans.
“We therefore do not take Mr President serious on this proclamation, and wave it aside as the usual political talk by a president, whose tenure remains only three years, while talking about 10 years.“Is there hope for Nigeria? Yes, there is, but it has to take an understanding of the danger unemployment and poverty put on our very existence as a nation, and the urgency for action to mediate them,” he said.
Suggesting some ways out, he called for a huge investment in Agriculture, focus on skills acquisition, up-skilling and re-skilling.
“A system of social transfers to increase the incomes of poor households will put funds into their hands for investment into small enterprises.
“All tiers of government should seek the creation of inclusive cities, and stop the idea of banning people already employed in activities like okada and tricycle riding, including street vending. The informal sector must be encouraged to remain.
“Robust support for SMEs, removing all the bottlenecks that restrict access to capital by entrepreneurs in this category, and deliberate creation of targeted micro businesses by government across the nation, and selling same to small entrepreneurs to run. If government can build houses nationwide and sell, why can’t it be business units?” he said.
Meanwhile, the ILO WESO report showed that the mismatch between labour supply and demand extends beyond unemployment into broader labour underutilisation.
Looking at labour market inequalities, using new data and estimates showed that at the global level, income inequality is higher than previously thought, especially in developing countries.Worldwide, the share of national income going to labour (rather than to other factors of production) declined substantially between 2004 and 2017, from 54 per cent to 51 per cent.
The WESO showed that with this economically significant fall being most pronounced in Europe, Central Asia and the Americas, it is more than suggested by previous estimates.Lead author, Stefan Kühn, said to tackle these kinds of labour market inequalities and gaps in access to decent work, there is the need to find a sustainable and inclusive path to development.
He maintained that labour underutilisation and poor-quality jobs mean economies and societies are missing out on the potential benefits of a huge pool of human talent.“Looking at economic growth, it finds that the current pace and form of growth is hampering efforts to reduce poverty and improve working conditions in low-income countries.
“The WESO recommends that the type of growth needs to shift to encourage higher-value added activities, through structural transformation, technological upgrading and diversification,” he said.
The report cautioned that intensifying trade restrictions and protectionism as Nigeria has done with the closing of its land borders, could have a significant impact on employment, both directly and indirectly.Moderate or extreme working poverty is expected to edge up in 2020-21 in developing countries, increasing the obstacles to achieving Sustainable Development Goal (SDG) 1 on eradicating poverty everywhere by 2030.
Currently, working poverty (defined as earning less than $3.20 per day in purchasing power parity terms) affects more than 630 million workers, or one in five of the global working population.Other significant inequalities – defined by gender, age and geographic location – remain stubborn features of current labour markets, the report showed, limiting both individual opportunities and general economic growth.
In particular, a staggering 267 million young people (aged 15-24) are not in employment, education or training, and many more endure substandard working conditions.The annual WESO Trends report analyses key labour market issues, including unemployment, labour underutilisation, working poverty, income inequality, labour income share and factors that exclude people from decent work.
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