THE GLOBAL EMPLOYMENT CRISIS WILL GROW

25 05 2012

THE GLOBAL EMPLOYMENT CRISIS WILL GROW

“The global employment level is concerning and no improvement is expected in the near future.” This worrying claim has not been voiced by a soothsayer or a diviner though one might wish it were so. The claim has been advanced by the International Labour Organisation (ILO).

The ILO draws attention to a great danger and a big mistake. According to the ILO, harsh austerity measures are preventing the creation of job positions. Heavy taxes, hard cuts, additional payments, hikes and similar rises in costs support the inclination to make savings on personnel expenditure.

5.64 million people are unemployed in Spain, where 1.7 million households do not have a source of income. The level of unemployment in Spain, which is the weak link in the crisis chain is 25 percent and 50 percent among the young.

We are at a period of slow economic growth around the world. The population of the labour market increases while circumstances deteriorate. Unemployment levels in the USA and other developed countries are very high. As long as unemployment continues to rise, one should not expect global economic recovery. For economic recovery the real sector needs to grow and raise employment.

ILO data point out that there is no formula present that will lower the present level of unemployment while ensure employment for the 80 million people who are to enter the job market within the next two years. What ILO is politely saying is that even if the needlessly insisted upon austerity measures were given up and production and employment supported and as a result everyone who lost their jobs due to the crisis were to get them back, there is nothing anyone can do about the 80 million people to enter the job market.

ILO’s warning should be heeded especially in the Eurozone. It is not only Greece and Spain which have broken a new record in unemployment. In France unemployment has been rising for the past 11 months. Data from London and other European capitals are hardly uplifting. According to the ILO report, more than 40 percent of those looking for a job in developed economies have been unemployed for over a year. The possibility that youth unemployment will have severe direct and indirect impacts in the short and the medium term is very high. If harsh austerity measures are continued, the recession expected in Europe this year will be deep and long. Of course, the recession under the circumstances seems like it is well known and even willed, but that is a different matter.

The average level of unemployment in the 17 countries which are the members of the Eurozone have reached 10.9 percent. Although optimistic messages have been sent out since the beginning of the crisis, which people pretended was over, this is the highest figure in Europe in the last 13 years. These are not claims advanced by a newspaper or independent institute but by Eurostat. According to Eurostat data there are 17.3 million unemployed people in the Eurozone. The rise in the number of unemployed has continued unabated for 11 months.

Outside the Eurozone, in Britain unemployment is at its highest level in 17 years. There are approximately 2.6 million people unemployed in the UK. This means approximately 8 percent level of unemployment. The crucial point regarding British unemployment is that unemployment among those aged between 16 and 24 has gone past 21 percent. 1.6 million people in Britain receive unemployment benefits. The British economy, which is in recession, may not be able to slow its rate of contraction. As a result the economic crisis in the UK will deepen. President of the Bank Of Britain Mervyn King has said at the beginning of 2012 that “living standards in Britain had fallen at a level and rate unseen since the 1920s” and more recently that “Britain is perhaps facing the most serious financial crisis in its history”. At the same time, King said “even if it is not the greatest, this crisis is the most severe we are facing since the 1930s”, underlining the importance of the warning.

In the coming months, the entire world will suffer the consequences of the mistreatment of the illness in Europe. As European countries tried to overcome their debt crisis with cuts and to close their budget deficits, they have stimulated the unemployment crisis. According to ILO data, since the beginning of the financial crisis in 2008, 50 million people around the world have lost their jobs. Poverty has risen in two thirds of countries around the world. Of the 106 countries assessed, 57 experienced increased social unrest. That the European Union should experience recession could harshly impact on these 57 countries. The ILO expects global recovery to pick up from 2016 onwards. However this expectation can only be considered realistic if new problems are not added to those already existing and the present issues are dealt with correctly.

On the other hand there is no way to ignore the fact that with each phase of globalisation in world history, resources have become scarcer, leading to a crisis of the economy and of trade. This results in political and military confrontation. Blocked economies and crises ridden societies see a solution in war.

War stimulates the real sector. The revitalised real sector increases employment and leads to higher standards of living. Social and individual crisis decrease at wartime with the dynamism of wartime circumstances.

No one can suggest this solution. But world history shows that a heavy economic crisis and a social crisis seek a solution in war.

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