Restoring Jobs by Restoring Growth


By Min Zhu

Over 200 million people are unemployed around the world, with double-digit jobless rates in many European countries and in many emerging markets. Youth unemployment and long-term unemployment are at alarming levels.

The number of unemployed people is nearly 16 million higher today than in 2007 among countries where labor markets are tracked regularly by the IMF. Much of this increase has been in advanced economies (Chart 1).

The need to tackle the unemployment crisis in these economies is self-evident. But what is to be done?

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Jobs and Growth: Can’t Have One Without the Other?


By Min Zhu

(Version in Español, in عربي))

As Frank Sinatra crooned about love and marriage, so it seems about jobs and growth:

“This I tell ya, brother, you can’t have one without the other.”

The IMF’s latest World Economic Outlook projects global growth of 3 ½ percent this year. To the person on the street, what matters is how this growth translates into jobs and wages. The news on the jobs  front, unfortunately, remains grim.

Five years after the onset of the Great Recession, 16 million more people are likely to remain unemployed this year than in 2007. This estimate is for a set of countries for which the IMF forecasts unemployment rates; adding in some countries for which the International Labour Organization provides forecasts only boosts the number.

The bulk of this increase in unemployed people has been in the so-called advanced economies (the IMF’s term for countries with high per capita incomes), as shown in the chart below.

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Social Costs of Recession


By Caroline Atkinson

As I noted earlier this week, the recession seems to be easing its grip. In fits and starts, recovery is likely to get under way in coming months in most major economies. That is good news—especially compared to the gloom and fear earlier this year. But the bad news is that the social cost of the crisis is set to keep rising for some time. Unemployment—the symbol of the Great Depression—will get nowhere near the levels of the 1930s. But in advanced economies, jobless rates are already much higher than they have been for a long time.

The U.S. jobless numbers announced today give some encouragement, with a sharp decline in the number of jobs lost last month and an unexpected easing in the jobless rate. But, as a lagging indicator, unemployment worldwide is still expected to go on increasing well into 2010. The International Labor Organization thinks that as many as 50 million people could lose their jobs before this is all over. Of course, in emerging and low-income countries, where social safety nets are weak or non-existent, the human cost from unemployment is even higher.

As a lagging indicator, unemployment worldwide is still expected to go on increasing well into 2010 (photo: Sergio Perez/Reuters)

As a lagging indicator, unemployment worldwide is still expected to go on increasing well into 2010 (photo: Sergio Perez/Reuters)

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