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The number of unemployed could increase by 40 million in 2009, the ILO said Wednesday. The global financial meltdown has had an adverse effect on the employment situation throughout the world. As recession deepens in 2009, there seems to be no reprieve for the world`s unemployed.

The economic outlook for 2009 was bleak and the world economy was expected to grow just 0.9%. International trade had been adversely impacted by scarce inter-bank liquidity and risk re-assessment in 2008. The world economy grew 3.8% in 2008 according to the IMF. Growth in world merchandise trade slipped to 6% in 2007 after posting 8.5% growth in 2006. In 2008, import volumes declined 1.4% in the G7 countries in the second quarter, while exports dipped 0.3%. Further, all economic indicators in India, China and Russia were falling. 

Governments around the world had responded to the downturn by pushing through fiscal stimulus packages and other emergency measures to ward off the looming recession. However these steps were likely to take some time to have effect. Economists opined that the crisis would get worse before it gets better. As deleveraging by major companies continued, the credit crunch was likely to worsen. Trade, foreign direct investment and remittances were set to decline. The resulting rise in unemployment would decrease aggregate demand, while the fiscal packages announced so far had not stopped economies from sliding further.

The rate of global unemployment slipped to 6% in 2008 from 5.7% in 2007. In 2008, 5.8% of men and 6.3% of women were unemployed, while the total number of unemployed people increased by 10.7 million. This was the largest annual increase in joblessness since 1998, the ILO said. On the whole, there were an estimated 190 million persons out of work, comprising of 109 million men and 81 million women. The world employment to population rate decreased 0.2% in 2008. The number of unemployed youth increased to 76 million, while the youth unemployment rate increased 0.4%. The youth to adult unemployment ratio remained unchanged at 2.8% as also the youth labor force participation rate.

If the world economy continued to slide in 2009 as expected by economists, the number of unemployed could rise by 40 million over 2008, the ILO said. However if the global economy recovered partially, the number of unemployed would still rise by 20 million, while even in the best case scenario the number of unemployed would increase by 8 million in 2009.

`Employability of people deteriorates the longer they are out of a job,` the ILO pointed out. Further, young people who lose their professional edge in the unemployment caused by the downturn may fall into a vicious cycle of alternating between low paid insecure jobs and outright unemployment. The picture in developing countries was even more dismal. Well over half the workforce was employed in conditions that fall short of decent work. Three billion people were employed in 2008, an annual growth of 1.3%, yet below the average growth rate of 1.6% witnessed during the past ten years.

The economic crisis of 2008 has elevated the previous high level of concern over the social impacts of globalization, the ILO said. Measures must be designed not only to restore growth and financial stability, but also to minimize the negative social impact particularly in emerging and low-income countries, the organization added. This called for an unprecedented level of policy coordination, integrating finance, trade, development and labor issues, together with policies to create jobs and targeted safety nets.

`Governments, employers and workers are especially concerned about the effects of the crisis on people, on enterprises and employment, on social cohesion and on stability. We know from past experience that economic crises carry severe social and labor consequences that affect most the weakest segments of society and can increase poverty and inequality unless effective measures are put in place,` the Officers of the Governing Body of the ILO said.
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