Employment

OECD, ILO call on G20 labour ministers to reinforce cooperation

 

17/07/2013 - Joint statement by ILO Director-General Guy Ryder and OECD Secretary-General Angel Gurría on the occasion of the G20 Labour and Employment Ministers’ Meeting, Moscow, 18-19 July 2013

 

We, the Heads of the International Labour Organisation and the Organisation for Economic Cooperation and Development, call upon the Ministers of Labour and Employment of the G20 countries to reinforce their cooperation with a view to enhancing the design and scale of their employment, labour market and social protection policies in order to achieve higher levels of productive and rewarding employment and to contribute to a strengthening of the world economy.

 

Even though six years have elapsed since the start of the global financial crisis, the rate of employment growth remains weak in most G20 countries, preventing a significant decline in high levels of  unemployment and under-employment.

 

As reported in the background documents prepared jointly by the ILO and the OECD for the G20 Labour and Employment Ministers meeting, there is considerable diversity across countries in labour market conditions.  Over the last 12 months, unemployment has dropped marginally in half of the G20 countries while it has risen in the other half.  Unemployment is above 25 per cent in South Africa and Spain; 11 per cent or above in France and Italy and for the EU as a whole; above 7 per cent in Canada, Turkey, United Kingdom and United States; and below 6 per cent in Australia, Brazil, China, Germany, India, Indonesia, Japan, Republic of Korea, Mexico, Russian Federation and Saudi Arabia.

 

Across all G20 countries, the total number of unemployed reached 93 million in early 2013, some 30 per cent of which on average have been unemployed for over one year. Jobs have been shed mostly in manufacturing and construction in advanced economies whilst construction has been the leading job creating sector in several emerging economies.

 

The employment-to-working age population ratio remains below its pre-crisis value in 13 countries.  Some 67 million jobs would have to be generated to restore the previous employment-to-population ratio in all countries. In the majority of them, real wage growth has either slowed-down in the most recent year or turned negative.

 

In spite of differences in their characteristics, all G20 countries face significant short-term and medium-term employment challenges. A combination of supportive macro-economic policies and well-designed employment, labour market and social protection policies are required to address these challenges.

 

Our joint report on recent policy measures taken by G20 countries points to a significant number of new initiatives in these areas over the last three years, which are well-aligned to the policy priorities identified by G20 Leaders. Yet the weakness of the global economy has blunted many of these efforts and additional cooperation would greatly enhance their impact on employment. It is of utmost importance to restore stronger, sustainable economic  growth,  increase investment and enhance the conditions for renewed bank lending by restoring health to the financial system.

 

We call on Ministers to give youth employment their full attention. The situation of young people entering the labour market remains fraught with obstacles. Youth unemployment was above 16 per cent in the first quarter of 2013 in 10 countries, including 5 countries with youth unemployment at 20 per cent or more  (France, Indonesia, Italy, United Kingdom, Saudi Arabia, and the European Union) and 2 countries with a rate above 50 per cent (Spain and South Africa). Countries that have achieved low youth unemployment rates have combined a supportive economy with rising employment levels, high levels of completion of primary education, strong vocational education, including through dual learning and apprenticeships, as well as strong orientation and guidance for young people. In all countries, more can be done to give young people a better start in the labour market, especially for those not in employment, education or training.

 

The Russian Presidency has rightly placed growth and jobs high on the agenda of the G20. The G20 will be assessed by public opinion around the world on its capacity to deliver on the growth and jobs agenda. This calls for a combination of policies to lift aggregate demand in those countries where it is weak and to enhance business investment and entrepreneurship development more generally. Of particular importance are measures to raise investment, particularly in infrastructure, improve and continue access of small enterprises to bank credit; expand the coverage of social protection; sustain the income of low-paid workers through appropriately-set minimum wages and in-work benefits; promote the role of collective bargaining in setting wages in line with productivity growth; and lift the employment prospects of young women and men.

 

The experience of a number of countries suggests that high employment levels and inclusive growth can be achieved through a well-designed combination of supportive macro-economic policies and employment, labour market and social protection policies. But this requires a careful balancing between providing adequate income support for those out of work and with low incomes and activation measures which help them to find rewarding and productive jobs. Social partners play an important role in shaping the design of policies to the characteristics of national and local circumstances.

 

The employment situation in G20 countries would improve considerably with a more supportive external environment dependent on what G20 countries do for their own economy. This requires the collective effort of all countries working towards the shared objective of strong, sustainable and balanced growth. The ILO and the OECD stand ready to work with G20 Ministers to contribute to this objective that would lift the employment and income prospects of women and men the world over.

 

For more information about the OECD's involvement in the G20, please visit: www.oecd.org/g20.

The joint ILO-OECD reports are: Short-term labour market outlook and key challenges in G20 countries, and Addressing employment, labour market and social protection challenges in G20 countries: Key measures since 2010.

For further information, journalists are invited to contact the OECD’s Media Division (news.contact@oecd.org; tel: + 33 1 45 24 97 00).

 

 

 

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