7.A. Employment
First, an employment crisis continues to affect much of the globe.
The world experienced jobless growth prior to the crisis, and this
intensified as labour demand weakened (ILO 2010a:7). ILO’s
(2011) latest analysis notes that, while there is evidence of
employment recovery in some East Asian countries, the outlook
worsened for many others during 2010. The ongoing economic
recovery is not yet leading to a sufficient expansion in employment
opportunities for most. At the global level, trends in the
employment-to-population ratio, which indicates whether the
employment-generating capacity of a country or region is rising or
falling, show that economies are simply not generating sufficient
employment opportunities to absorb growth in the working-age
population. For example, in 64 countries for which quarterly data
are available, the number of countries with falling employment-to-
population ratios was still twice the number that had rising ratios as
of the second quarter in 2010. More recently, in rich countries,
estimates for the return to pre-crisis employment levels were
revised an additional two years—to 2015. Near the end of 2010,
ILO (2010a) also estimated that nearly 40% of jobseekers had been
unemployed for more than one year in a sample of 35 countries,
and more than four million had stopped searching altogether by the
end of 2009 due to, for example, demoralization. The public
response in many countries has included major protests against the
government in its role as employer and failure to address dogged
unemployment (ILO 2010a:40).
In terms of inequality, evidence shows that rising unemployment
causes the bottom of the earnings distribution to fall off relative to
the median (Heathcote et al. 2010). Further, total wage inequality—
defined as the difference in the earnings of those at the 90
th
and 10thpercentile of the overall wage distribution—had increased
dramatically in many countries since the 1970s (Machin and van
Reenen 2007, OECD 2008). More recently, evidence points that the
trend has continued during the crisis. In advanced economies, for
example, banks and corporations provided near-record bonuses to