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How slow global employment growth undermines social justice

By Gloria Nwafor
31 January 2023   |   4:07 am
The global labour markets are facing serious, interlinked challenges, as issues such as growth in poverty, slowing employment, effects of inflation on wages and purchasing power, emerge as long-term structural challenges to demography, technology and climate change.

ILO Director-General, Gilbert Houngbo

The global labour markets are facing serious, interlinked challenges, as issues such as growth in poverty, slowing employment, effects of inflation on wages and purchasing power, emerge as long-term structural challenges to demography, technology and climate change.

A new International Labour Organisation (ILO) report, World Employment and Social Outlook: Trends 2023 (WESO trends), has raised concerns about inequality and effects of the global economic slowdown on the quality of employment.

It warned that if left unaddressed, the challenges facing the world of work might threaten progress towards social justice.

The report said the current global economic slowdown is likely to force more workers to accept lower quality, poorly paid jobs, which lack job security and social protection, therefore accentuating inequalities exacerbated by the COVID-19 crisis.

It projected that global employment growth would be only 1.0 per cent in 2023, less than half the level in 2022.

It means global unemployment is slated to rise slightly in 2023, by around three million, to 208 million (corresponding to a global unemployment rate of 5.8 per cent).

It stated that the moderate size of the projected increase is largely due to tight labour supply in high-income countries.

This would mark a reversal of the decline in global unemployment seen between 2020-2022, meaning that global unemployment will remain 16 million above the pre-crisis benchmark (set in 2019).

In addition to unemployment “job quality remains a key concern”, the report says, adding that “decent work is fundamental to social justice.”

Noting that a decade of progress in poverty reduction faltered during the COVID-19 crisis and despite a nascent recovery during 2021, it said the continuing shortage of better job opportunities is likely to worsen.

“The current slowdown means that many workers will have to accept lower quality jobs, often at very low pay, sometimes with insufficient hours. Furthermore, as prices rise faster than nominal labour incomes, the cost-of-living crisis risks pushing more people into poverty.”

The WESO Trends said the labour market deterioration was mainly due to emerging geopolitical tensions and the Ukraine conflict, uneven pandemic recovery and continuing bottlenecks in global supply chains, stating that together, these have created the conditions for stagflation – simultaneously high inflation and low growth – for the first time since the 1970s.

In 2023, the report added that Africa should see employment growth of around three per cent or more, while the growing working-age populations are likely to see unemployment rates decline only modestly from 7.4 to 7.3 per cent.

Sharing his thoughts on the report, ILO Director-General, Gilbert Houngbo, said the need for more decent work and social justice was clear and urgent.

Houngbo said if countries were to meet the multiple challenges, they must work together to create a new global social contract.

According to him, the ILO will be campaigning for a global coalition for social justice to build support, create the policies needed and prepare economies for the future of work.

Finding the way out in reducing the impact on some of the challenges ahead to achieve social justice, especially as Nigeria prepares for its forthcoming general elections,

General Secretary, the Federation of Informal Workers’ Organisation of Nigeria (FIWON), Gbenga Komolafe, said with the combination of dire global economic trends and unimaginative political leadership offerings in Nigeria, citizens’ hopes for a better 2023 might be dimmed.

According to him, the three main parties in the political landscape have been active participants in the rot of the last four decades, particularly since the advent of the present democratic dispensation

“People have also been politically mobilised on negative, backward, political sentiments of religion and tribe, rather than serious economic policy issues. But the system as it is, is getting increasingly untenable,” he said.

With challenges facing the global labour market, Komolafe said the direct consequences on Nigeria is that the costs of import continue to increase, while cost of industrial machinery, spare parts and raw materials, among others might further escalate in 2023.

With the challenges ahead, he said this might lead to local industries finding it more difficult to survive (many of them have been on edge since the COVID-19 crisis), leading more workers being squeezed out of formal employment.

According to him, these workers will run into the informal economy to pick up survival activities, further compounding the labour glut and extreme competition in the informal economy.

“Unfortunately, most of the leading political parties are canvassing exactly the same neo liberal policies that had not done the Nigerian economy in over the last four decades. The three dominant parties are promising to ‘remove subsidies’ of petroleum products, privatise and commercialise social services even further. No new ideas are coming from these new parties about how to move the economy forward by being less dependent on imports.

“Economic liberalisation that they are promising has only escalated costs of production, crippled local industries, all of which led to mass unemployment and poverty proliferation in the past four decades. It has also promoted an unprecedented wealth concentration in very few hands. Nigeria now boasts of a handful billionaires in dollars, while most Nigerians now live in grinding poverty,” he said.

Proffering solutions to the country’s rising unemployment rate, Director-General, Nigerian Employers’ Consultative Association (NECA), Adewale-Smatt Oyerinde, who noted that the private sector creates eight out of every 10 jobs, said there is the need for government to deliberately support organised businesses, rather than keep choking businesses with taxes and levies.

He said the government must support the real sector to thrive and give more attention to technical skills development.

According to him, giving more attention to technical skills is a panacea for job creation.

“NECA and Industrial Training Fund (ITF) run technical and skills development programmes, Technical, Vocational Education and Training (TVET). As is done in other climes, give people skills to be independent. If I have the skill, I probably won’t be looking for a job. There is a market for every skill. TVET is a major driver for job creation in other climes.

“The ripple effects of TVET can’t be quantified. If I am in government, I will implement one or two policies that will affect our national lives, which will also make an impact in other sectors. They are critical beyond focusing on infrastructure and other challenges.

“ITF/NECA collaboration has been going on for over 10 years and churned out thousands of youths as graduates in over 25 trade areas, such as ICT, mechatronics and fashion designing, among others. Hardly will you find any of our graduates, who come from the skills trade area without employment or have not started his/her own business, because they are equipped with critical skills the industry needs.

“We encourage the government to deepen the engagement, as we pride it as one of the best private partnership projects in the country,” he said.