Posted on 12/09/2005 8:11:20 PM PST by AZRepublican
Press Release - International Labor Organization
GENEVA (ILO News) - Global economic growth is increasingly failing to translate into new and better jobs that lead to a reduction in poverty, according to a new report issued by the International Labour Office (ILO) here today. In the report, the ILO points out that within this global trend, different regions show mixed results in terms of job creation, productivity results, wage improvements and poverty reduction.
Taking a global view, the 4th Edition of Key Indicators of the Labour Market (KILM) (Note 1) says that currently, half the world's workers still do not earn enough to lift themselves and their families above the US $2 a day poverty line.
"The key message is that up to now better jobs and income for the world's workers has not been a priority in policy-making", said ILO Director-General Juan Somavia. "Globalization has so far not led to the creation of sufficient and sustainable decent work opportunities around the world. That has to change, and as many leaders have already said we must make decent work a central objective of all economic and social policies. This report can be a useful tool for promoting that objective."
The study finds that while in some areas of Asia economic expansion is fostering solid growth in jobs and improvements in living conditions, other areas such as Africa and parts of Latin America are seeing increasing numbers of people working in less favorable conditions, especially in the agricultural sector. The KILM also says that for millions of workers, new jobs often provide barely enough income to lift them above the poverty line, or are far below any adequate measure of satisfying and productive work. The total number of working women and men living on less than $2 a day has not fallen over the past decade although at 1.38 billion it is a smaller share of global employment at just below 50 per cent, a decline from 57 per cent in 1994.
The report emphasizes that in many developing economies the problem is mainly a lack of decent and productive work opportunities rather than outright unemployment. Women and men are working long and hard for very little because their only alternative is to have no income at all.
The new KILM paints an in-depth picture of both the quantity and quality of jobs around the world by examining 20 key indicators of the labour market. The KILM covers quantitative topics such as labour force participation, employment, inactivity, employment elasticities, sectoral employment, labour productivity and unemployment, and qualitative issues such as hours worked, wages, employment status, unemployment duration and others.
Economic growth is not leading to job creation
In recent years there has been a weakening relationship between economic growth and employment growth, meaning that growth is not automatically translating into new jobs. The report's "employment elasticities" indicator allows one to look at the relationship between economic growth - measured in GDP - and two of growth's contributory variables, the positive or negative change in employment and productivity. The biennial study found that for every 1 percentage point of additional GDP growth, total global employment grew by only 0.30 percentage points between 1999 and 2003, a drop from 0.38 percentage points between 1995 and 1999.
With employment growing between 0.5 and 0.9 percentage points for each additional percentage point of GDP growth, the most employment-intensive growth has taken place in the Middle East and in Northern and sub-Saharan Africa. A review of other indicators, however, shows that much of the employment growth in these regions is in the category of "self-employment" which includes most women and men in the informal economy where working conditions are often poor. While more jobs are being created in economies where agriculture dominates employment such as those in sub-Saharan Africa, many of the jobs are in the informal economy, at low-levels of productivity, and fail to provide workers enough income to pull themselves or their families out of poverty. For example, the number of workers living on less than US$1 per day increased by 28 million in sub-Saharan Africa between 1994 and 2004.
By contrast, economic expansion in East Asia was sufficient to generate employment growth, productivity growth and a reduction in the high incidence of poverty in the region. Latin America, however, experienced a decline in the employment intensity of growth between 1999 and 2003. At the same time, the number of working poor in the region at the US$1 a day level increased by 4.4 million. In recent years, economic growth in Latin America has been relatively more employment intensive for females than for males, which reflects a substantial narrowing of the labour force participation gap between men and women in the region.
In both Western Europe and North America, the services sector has experienced the most robust growth - both in terms of value added and employment growth. Between 1991 and 2003, for every 1 percentage point of growth in the services sector, employment increased by 0.57 per cent in North America and by 0.62 per cent in Western Europe. However, the report finds evidence of a divergence in employment performance between North America and Western Europe between 1991 and 2003, with the employment intensity of growth decreasing in the former and increasing in the latter between 1991 and 1999, with a further significant reduction in North America and a mild reduction in Western Europe between 1999 and 2003.
Global wage inequality on the rise
The 4th Edition KILM shows that between 1990 and 2000, wages increased faster in high-skilled occupations than in low-skilled occupations globally. Although these findings do not show a general deterioration of the wage position for low-skilled workers, they do suggest widening wage inequality between high- and low-skilled workers during the 1990s.
Rising wage inequality in the developed economies has been mainly attributed to greater demand for higher-skilled labour, which is in short supply and to lesser demand for workers with lower-level education. Other explanatory factors, although of less impact, include increased trade with developing countries and increased immigration of low-skilled workers. In developing countries, factors impacting on rising wage inequality include industry wage premiums resulting from changes in trade policy that favour workers in specific industries, the increasing size of the informal economy, which generally has lower wages and less favorable working conditions, and a shortage of high-skilled workers.
Labour costs and labour productivity bring unequal results in terms of global competitiveness
The report concludes that the competitiveness of a high-wage economy is not immediately threatened by lower labour costs elsewhere, as countries with low labour costs are usually also characterized by lower productivity levels. The report demonstrates how competitiveness is determined by the combined outcomes of elements of the productive process - the cost of utilizing labour (labour compensation) and labour productivity (output per person employed) - and by exchange rate fluctuations. The report's analysis of competitiveness in the "unit labour costs" indicator shows the following:
In the European Union-15, it is not so much high labour costs but lower productivity in the manufacturing sector and appreciation in the Euro that has threatened the competitive position of the region vis-à-vis the United States.
The manufacturing unit labour cost level in Japan has not only been high relative to the United States, but also in comparison with that of the EU-15. However, since the mid-1990s, the gap has decreased due to a moderation in wage growth in Japan, a weakening of the yen-US$ exchange rate in 2005 and an improvement in the comparative productivity performance of Japanese manufacturing.
The Republic of Korea has shown rapid improvement in labour productivity relative to the United States, but unit labour costs in the country have increased due to rapid wage increases during the early 1990s.
Productivity has weakened in Mexico, but because labour compensation levels are lower, unit labour costs have also remained lower than in the United States.
The United States continues to show the highest labour productivity levels measured as value added per person employed. Despite faster productivity growth rates in some European Union countries, especially the new EU Member States, the productivity gap, measured in value-added per person employed, between the United States and most developed economies continues to widen. One exception is Ireland where this measure of the productivity gap with the US has been steadily narrowing since1980. A slightly different picture emerges if productivity is measured by value-added per hour. This shows that some European countries are more productive than the US and for others the gap is less wide. However, most Europeans work shorter hours and have longer holidays than their US counterparts.
In Central and Eastern Europe, the transition to a market economy led to an increase in productivity but a fall in employment. The new EU Member States show a significant advantage in terms of international competitiveness with unit labour cost levels at approximately 70 per cent of the US level. Increased competitiveness, however, is not benefiting the population in terms of job creation and wages. The region shows some of the world's highest unemployment rates and many of those not working have simply given up the job search, as reflected in the region's high inactivity rates.
In other key findings, the KILM shows that:
Women are continuing to catch up to men in terms of participation in labour markets throughout the world. Nevertheless, women continue to be disproportionately engaged in low-wage, low-productivity and part-time jobs, and in many regions such as the Middle East, North Africa and South Asia, women's participation in the labour market still lags far behind.
While the most severe working poverty is growing in Africa, it is declining in Asia and Central and Eastern Europe.
Youth unemployment rates are typically at least twice as high as adult rates and are sometimes much higher. However, in most countries, the illiteracy rates of adults are higher than those of youth, suggesting that young people are increasingly better prepared for the labour market.
Developed economies and the European Union are faced with a growing number of "underutilized" labour resources, including the unemployed and involuntary part-time workers looking for a full-time job. In both France and Italy, the rate of "underutilized" labour reached 21 per cent in 2004, up from 17 per cent in 1994 in France and 12 per cent in Italy.
In that case where the rules are different the free economy will always lose.
Can you cite some examples of a free economy losing to a protected economy that employs price fixing, government fiat and slave labor?
Thus the ideal that free trade is based on is deeply flawed because the Theory believe that all countries are playing by the same rules when they are not.
So free trade agreements don't specify the conditions for trading? Are you saying that none of the countries signing trade agreements adhere to the rules?
Free trade will slowly choke the life blood out of the USA.
When was the last time this country rejected a free trade agreement? Since that time, what empirical evidence can you offer that free trade has choked the life blood out of the USA? I'd be particularly interested in GDP growth, employment growth and any increases in family wealth since then. You could also look at our growth in exports, absolute manufacturing output and our standard of living.
Fair trade on the other hand will benefit not only the Rich but the middle class and the poor also.
I just love that term. No one ever bothers to explain what fair trade is or--even more to the point--to whom trade should be fair. In the name of fairness, different groups advocate different protections for their specific industries and call the comparative advantage of other countries "unfair."
How do you define fair trade? Fairness assumes a dubious character in policies that pick and choose whom to treat "fairly."
As is clearly demonstrated in the Index of Economic Freedom, once economic barriers begin to emerge, a nation's wealth begins to decline. The only form of fair trade is free trade.
Thus China/USA trade is tilted in favor of China..
I don't suppose you'd have any data to back that up, would you?
All C-R-A-P.
And those McMansions you speak of, are mass-produced plastic-looking disneyesque eyesores.
Within this debate I am reminded of Dicken's Tale of Two Cities. It was the best of times it was the worst of times..... I guess that sums it up pretty well.
Do you understand how net worth is calculated? It's simply assets minus liabilities. Our family net worth is currently about $51 trillion, which is double what it was just a decade ago.
Federal Funds Report (page 110)
National debt again at an all time high.
Yes, I've heard we have a large external debt. It's about $8.1 trillion which equals about $27,000 for every American. This is up about $295 in the last year.
So now we understand the debt. Let's talk about assets. American households have assets of $66 trillion. That's $220,735 per person? Our assets are up almost $7,000 in the past year.
Would you be willing to give up $295 in debt to pick up $7,000 in assets? If so you'd have a profit of around $6,705.
Personal savings is at an all time low.
Did you know that 401K contributions are not considered savings? Also, Government methodology understates income and overstate expenses mostly because it does not count capital gains from the sale of stocks or homes as part of disposable income, but it does count capital gains taxes as expenditures.
The U.S. Treasury data shows that Americans have earned more than $3.5 trillion in capital gains since 1997. This is more than the combined gains of the preceding 20 years. All that money has to be coming from somewhere.
In a recent Bear Stearns report on savings, David Malpass (NRO financial writer and Bear Stearns chief economist) shows per capita assets in the U.S. of $89,800 that make us the top saving country in the world. (Japan is second at $76,900 per head.)
It now takes two incomes to have all that wealth when in 1975 there was a large percentage of one income earners.
Nonsense. Since 1973 real per capita disposable income has soared from $17,727 to the current $26,725.
Japan/china vs the USA are two that come to mind we have trade deficits with each country. Taiwan also trade deficit.
Maybe you should begin by explaining why a trade deficit is bad. We've had a trade deficit for 30 years now. The last time we had a trade surplus was during a recession. Our per capita GDP and standard of living are higher than any of the countries you mention. If a trade deficit is bad then where does our economy show the negative impact? GDP growth, employment growth, income growth, productivity growth? Where is the bad news? We manufacture and export more now than at any other time in our history.
I.e we have a net lose of weatlh from this country to those country.
Our economy is larger than any of those countries you mentioned. Our per capita GDP is larger than any of those countries. Do you think that economics is a zero sum game? If so, where's your proof?
Our technology edge is gone because we traded it away for nothing in return..\
More nonsense. We still lead the world in just about every area of technology.
our military edge is shrinking because the free unrestricted trade with China is allowing them to jump decades ahead in technology in mere years.
China's military has a long way to go to even come close to ours. They have a lot of hurdles to overcome between now and then.
You can not compete with someone making .50 cents an hour no matter how much productivity you have especially when you are exporting those productivity improvements so the .50 an hour person will become as productive as you in the next few years.
Yet we continue to make and export more now than at any other time. Our industrial production is up more than 50% since 1992 and real earnings are also increasing. Looks like we're competing just fine against the people you say we can't compete with. Maybe you should learn some more about productivity before making statements like the above.
The WTO gives countries little say in the country to country conditions of trade.
I'd add GATT to your reading list as well because you don't understand the WTO.
We have ceded our interests to a world body that could care less about nation states, individuals freedom, etc etc.
Ahh, the old loss of sovereignty argument. Funny, you protectionists can never seem to identify anything specific that clearly demonstrates where we have lost any of our sovereignty. Are you familiar with the Canadian softwood debate?
Most manufactured goods come form outside countries and are assembled here
More feelings? I thought all those low skilled assembly jobs were the ones being shipped overseas in 40 ft. containers.
What will we do in a time of war. Order our parts from Brazil?
We've been unable to source the products we need for the war in Iraq? It's a strong economy that gives us a superior military. You offer lots of opinions in your post but nothing to back anything up. You should learn more about trade and our economy then you wouldn't be so afraid of things that don't exist.
Is that all you've got to prove your point? I'll rest my case then.
And those McMansions you speak of, are mass-produced plastic-looking disneyesque eyesores.
Careful, your envy is showing.
Careful, your bad taste is showing.
(You should note, btw, that I spoke only of McMansions, not of America's beautiful and stately old homes, which are--no matter how large and expensive some may be--the next best thing to see after nature iteslf--although I concede that many Victorian era homes were the McMansions of their day, however I can forgive that earlier generation its naive taste, save for an occasional overly exuberant example.)
You point to crap--most of which are vices, and wasteful vices.
I find a color TVs, air conditioners, and a host of electronic gadgets a poor recompense for sacrificing one's career to another country.
Those free trade dreamers forget that the majority of people have IQs of 100 or below.
And their utopia makes no provision for the future of those workers.
I note that a cleaning woman (so I'm sexist) works as hard as any MBA, yet earns so much less.
Why is that?
Because the MBA's and JD's make the laws, directly or by guile.
And those laws oppress the manual laborers, whom the educated elite fancy do 'menial' labor, compared the their own more important work.
And so to keep the educated elite in clover, they exploit the voiceless working poor.
And as a percentage of that elite have grown in power, they now are exploiting the middle class, under the guise of building a new global economy.
Yesterday they came for manual workers by flooding the labor pool with immgrants--legal and illegal immigrants.
Today they come for tech support workers via immigration and outsourcing.
Tomorrow, they come for your job.
I would like to know where in the Constitution that says that every American has a right to a good paying job????
You mean that document written by 19th century elites?
You know, the same people who only allowed land-owners to vote?
It is kind of funny to read the comments of mainland China manufacturers:
"How can we compete with America? They have such high productivity! Their best workers look forward to working extra! They can get rid of the worst workers. It is much more difficult to be successful here."
Teddy Roosevelt was responsible for instituting the death tax.
Once, long ago, it was considered bad form for government to rob widows and orphans with duties, fees, or taxes. Thank goodness we are beyond that now. Now we recognize that the sad loss of a protector and wage earner creates a window of opportunity for the cash strapped government. (sarcasm light on!)
Global economic growth is increasingly failing to translate into new and better jobs that lead to a reduction in poverty.
But i thought the so called powers that be had that all sewn up and on track for the 22nd century ?
Didn't the war on poverty solve this problem ?
B...B...But... I thought that a rising tide lifts all boats! Somebody call Jack Kemp and Bill Bennett gosh-darn it!
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