After dropping for the past two years, global unemployment is on the rise again according to the International Labor Organization, a UN jobs watchdog. 2013 is expected to top 200 million unemployed for the first time with the epicenter in the advanced economies as 28 million jobs have been lost since the onset of the crisis. Critically, for the globalists, they unsurprisingly note that macro imbalances have been passed on to the labor market to a significant degree.
Weakened by faltering aggregate demand, the labor market has been further hit by fiscal austerity programs in a number of countries, which often involved direct cutbacks in employment and wages, directly impacting labor markets. Far from the anti-cyclical response to the initial crisis in 2009 and 2010, the policy reaction has been pro-cyclical in many cases in 2011 and 2012.
Moreover, some 39 million 'discouraged' people have dropped out of the labor market as job prospects proved unattainable, opening a 67 million global jobs gap since 2007. However, regions that have managed to prevent a further increase in unemployment have experienced a worsening in job quality, as vulnerable employment and the number of workers living below or very near the poverty line increased. "These are people who,... have given up hope, ...and therefore they are not counted as unemployed but more as discouraged."
Global unemployment is on the rise once again - after two years of falling... and is expected to rise for the next two years at least...
One of the main drivers appears to be 'uncertainty'...
Many developed economies have seen a sharp rise in the unemployment rate mainly as a result of lengthening unemployment duration and rising long-term unemployment
But between 2007 and 2012, the biggest overall contributor to the decline in global employed-to-population ratio was a decline in labor force participation rates...
A modest silver lining perhaps is that there are signs of an emerging consumer working class in developing countries, potentially substituting for some of the consumption slowdown in advanced economies. With the crisis, however, progress in poverty reduction has slowed and could adversely affect growth of the emerging middle class. This will impact negatively on the capacity for developing economies to play a stronger role in supporting global economic activity and offer alternative engines of growth.
But of course, it is the youth unemployment that is most worrisome. So far, only Austria, Germany and Switzerland have managed to keep youth unemployment low. Some young people have started to return to or prolong education, to acquire new skills in order to improve their future labor market chances; others have dropped out completely or are increasingly frustrated in their job search without, nevertheless, returning to the education system.
This group of young people that is neither in employment, education nor training (NEET) has grown since the crisis, in particular among European crisis countries, and is expected to increase further as recessionary conditions continue to prevail in the Euro area.
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