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In contrast to the rising unemployment in Western regions where the exception is a rise of the unemployment rate of at least a percentage point in six European countries in the years to come (Greece, Italy, the Netherlands, Poland, Portugal and Spain) (OECD, 2013), most developing regions and especially the emerging markets have higher employment numbers now than before the crisis.
Latin America and the Caribbean have even seen a decrease of the general and youth unemployment rates over the last 13 years from 8.6% total unemployment in 2000 down to 6.5% in 2013 (ILO, 2014). A further gradual, yet more moderate, decline in unemployment is prospected until 2018.
The Central and Southeastern Europe (non-EU) and Commonwealth of Independent States, with 8.2% unemployment in 2013, also dealt with a lower percentage than in 2000 (when it still was 10.7%). Yet the region has not shown a continuous decrease as the 2013 percentage is the same as it was in 2007, while in the in-between years the percentage temporarily peaked to 9.9% in 2009 (ILO, 2014).
Southeast Asia and East Asia have shown impressive employment growth, however, with an extremely high population growth, unemployment remains high. East Asia accounts now for about 20% of the total world’s share of people without a job. This is the second position in unemployment shares globally, with 39.4 million officially unemployed in 2013 (an increase of 8.0 million people since 2007). Yet, in 2013, an estimated 415 million workers held a salaried job in East Asia (ILO, 2014). The region has seen impressive growth with a near doubling employment level in comparison to 1991. The share of wage workers in total employment increased from 18.5% in 1991 to 50.1% in 2013. In this period the region “successfully moved 464.5 million workers out of poverty, an astounding and unprecedented pace of improving household incomes and living standards,” according to the ILO (2014, p.53). The question for the region now is how to retain the trend of increasing employment, if investment and growth levels stabilize.
No region has an employment growth matching that of South Asia, where employment grew with almost 2% in 2013, about twice the percentage of 2012. Since 2008 this region shows the lowest percentage of unemployed people with a rather stable number of around 4%. Nevertheless, because of very large populations, South Asia represented more than 45% of the world’s new job seekers in 2013. Yet, labour force participation rates (the percentage of the population of working age, actually participating in the workforce) in that region were at 56.1% in 2013. This was amongst the lowest in the world, mainly because of women not participating in the labour force (ILO, 2014).
Despite similar trends of rising employment, the Middle East and North Africa have the highest unemployment rates in the world. The rate of 12.2% of unemployed people in 2013 in North Africa is lower than it was in 2000 when it was as high as 13.2%. In this region, however, the decrease stopped in 2011, with rising numbers to 11.8% versus 10.4% the previous year. Besides, nowadays, 27.2% of the youth in the Middle East has no job, and 29.4% in North Africa are unemployed (ILO, 2014). Many workers only find jobs in the informal economy. The regions have a “long-standing and structural” problem of youth unemployment, according to members of the Global Agenda Council on Employment to the World Economic Forum (WEF, 2013). This situation has deteriorated with the political instability in the aftermath of the Arab revolutions. The high levels of unemployment, especially among the youth, political tensions and social instability are expected to increase across the region well into the 2020s.
In sub-Saharan Africa, official unemployment rates have remained stable at around 7-8% in the last decades, with some decrease in recent years. From 1991 to 2000 the average official unemployment rate in the region was 8.4%. Between 2000 and 2005, rates decreased to 7.5%. Yet, since then, unemployment has remained rather stable with the percentage for 2013 expected to be 7.6% (ILO, 2014). The McKinsey Global Institute (2012) estimates the situation slightly more pessimistic, and calculates unemployed at 9%. UNDP (2013), in addition, assumes a number of 10% officially unemployed on the whole continent.
Despite the fact that the continent shows one of the highest economic growth rates – the rate for the total region was 4.8% in 2013, so not many new jobs have been created. A large portion of this growth has primarily come from natural resource sectors that do not create many new jobs (they employ only 1% of the African workforce).
However, according to UNCTAD (2013), the less-developed countries altogether (of which most African countries) have a high labour force participation rate – an average of 75%, compared to 68% in other developing countries – and youth unemployment in this region is also below the global average (ILO, 2014). As The African Economic Outlook clarifies in low-income countries, unemployment is a luxury good that you have to be able to afford. If you cannot afford it you will necessarily find some work to do in order to survive (AfDB, OECD, UNDP, UNECA, 2012). Hence, only a small part of the working-age population has a paid, formal job – estimations of formal employment range from 13.7% (ILO, 2014) to 30% (UNDP, 2013). Where in many developing economies the manufacturing sector has served as an engine of paid employment creation, by and large this has not happened in sub-Saharan Africa, where only less than 10% of workers are estimated to be in the industrial sector. In all other regions, this share is at least 20% and in the case of East Asia it exceeds 30% (ILO, 2014). The absence of formal employment options, lacking social protection mechanisms and limited family support force people into the informal sector. Still 165 million Africans are still working in subsistence agriculture or in informal self-employment (McKinsey Global Institute, 2012). Often this is vulnerable work and agricultural production is becoming a less viable livelihood for the rural poor (UNCTAD, 2013).
Nevertheless, the McKinsey Global Institute (2012) projects that by 2020, Africa will create 54 million new jobs, leaving 70 million people without work. But with the rapid growth of the African youth population, there will not be enough jobs for them (AfDB, OECD, UNDP, UNECA, 2012).
Fine, D. et al. (2012) ‘Africa at work: Job creation and inclusive growth.’ McKinsey Global Institute.
International Labour Organization (2014) ‘Global Employment Trends 2014. Risk of a jobless recovery?’ ILO
Lusigi, A. (2013) ‘Structural Change & Employment in a Globalizing World: Creating Jobs for all?’ UNDP Presentation.
OECD (2013) Employment Outlook 2013. OECD publishing.
United Nations Conference on Trade and Development (2013) ‘The least developed countries report 2013. Growth with employment for inclusive and sustainable development. Overview.’ UNCTAD.
World Economic Forum (2013) ‘Jobs for Growth and Growth for Jobs. Global Agenda Council on Employment.’ WEF.
This article was previously published by The Broker.
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F. Schneider and R. Klinglmair