GENEVA (Reuters) – As many as 43 million workers risk dropping out of the world labour market or moving into long-term unemployment if governments revoke economic stimulus measures too soon, the International Labour Organisation said yesterday.
An early exit from support measures taken in the financial crisis could postpone a recovery in employment for years, the United Nations agency said in its latest World of Work report.
The report does not contain a forecast for unemployment over a specific timeframe, as data are incomplete.
In September, the ILO said unemployment in 2008 and 2009 could rise by 39-61 million from 2007 levels to a record 219-241 million. For 51 countries for which data are available — including the United States, Brazil, India and China — the ILO said at least 20 million jobs have been lost since October 2008.
A further 5 million are at risk of losing jobs if government support and job retention measures are dropped, and 43 million jobs could be lost between 2009 and 2012 if governments do not follow correct policies, the report concluded.
The rise in unemployment is turning out at the lower end of September’s forecast range because of job retention measures in companies helped by government support programmes, it said.
“Despite some initial signs of economic upturn and because of the significant rise in unemployment and in part-time work, support measures should not be withdrawn too early,” said Raymond Torres, director of the the ILO’s International Institute for Labour Studies and lead author of the report.
The ILO forecasts that employment in rich countries will not return to pre-crisis levels before 2013, while in emerging and developing countries it could start recovering next year but not regain pre-crisis levels before 2011.
The report reiterated ILO calls for reform of the financial sector, where it said excesses were the cause of the crisis.
Pressure for short-term financial returns had adversely affected wages and job stability in the real economy, and a return to business as usual could prompt new crises, it said.
