Unemployment on rise

Five million more people risk being made unemployed in 2008 as the global economy struggles with the US subprime crisis and rising oil prices, the International Labour Organisation (ILO) said today.
"This year's global jobs picture is one of contrasts and uncertainty," said ILO director general Juan Somavia. "While global growth is annually producing millions of new jobs, unemployment remains unacceptably high and may go to levels not seen before this year," he added.
The gloomy outlook is in contrast to the previous year, hailed by the ILO as a 'watershed' with 45 million new jobs created and only a slight rise in unemployment, which stood at 189.9 million people at the end of 2007.
The Geneva-based ILO said in its Global Employment Trends report for 2008 that the worldwide jobless rate is set to increase to 6.1 per cent from six per cent the previous year.
Economist Dorothea Schmidt said that five million fewer jobs are expected to be created in the year ahead. But the organisation's employment director Jose Salazar-Xirinachs conceded that these forecasts will have to be further revised after recent market turmoil wiped billions of dollars off stock exchanges, further stoking fears of a global recession.
"It is very likely that there will be a downward revision of production growth. If this happens we will have to revise our estimation in the labour market," he said.
South Asia was at the vanguard of job creation in 2007, accounting for 28 per cent of all new jobs. But the ILO cautioned that many of these new jobs remain vulnerable, with more than seven out of ten people in work classified as 'own-account' workers who lack social security and workplace protection.
The ILO urged governments to place labour market policies at the heart of macroeconomic strategy to ensure that growth translates into new jobs. "The current economic situation is therefore cause for significant concern, and the ILO will monitor developments closely over the coming year," Somavia said.
The ILO noted that, to date, the slowdown in industrialised countries due to the credit crunch and soaring oil prices has been offset by strong growth in developing economies, especially in Asia.
"Probably, for the first time ever, it can be seen that turbulence in one region (developed countries and the EU, and upfront the US) may not necessarily impact on other regions to the extent that a global slowdown is caused," the report stated.