ILO economist Steven Tobin

Deteriorating economic conditions, fewer quality jobs cited as cause

By Staff Writer

Deteriorating economic conditions and the global deficit in quality jobs in many regions, including Caribbean nations, threaten to undo decades of progress in poverty reduction, warns a new report by the International Labour Organization (ILO) in Geneva. What’s more, the report indicates relative poverty in developed countries is increasing.

ILO economist Steven Tobin summarized the report’s findings during its release in Geneva on March 18. Tobin said the report provides an estimate of the cost to eradicate extreme and moderate poverty globally. It also offers policy recommendations to address the structural challenges needed to provide both quality jobs and poverty reduction.

The report concludes by addressing structural challenges to providing quality jobs and suggests how to reduce poverty, see second story.

Using the latest available data, the ILO’s World Employment and Social Outlook (WESO) 2016 – Transforming jobs to end poverty, finds over 36 percent of the emerging and developing world live in poverty – on a daily income of less than US$3.10 purchasing power parity (PPP).

The report calculates that some US$600 billion a year–or nearly US$10 trillion in total over 15 years – is needed to eradicate extreme –and moderate poverty globally by 2030.

Better jobs crucial to improvement

The report concludes that the problem of persistent poverty cannot be solved by income transfers alone; more and better jobs are crucial to achieving this goal.

It is estimated that almost a third of the extremely or moderately poor in developing economies have jobs. However, their employment is vulnerable in nature: they are sometimes unpaid, concentrated in low-skilled occupations and, in the absence of social protection, rely almost exclusively on labour income. Among developed countries, more workers have wage and salaried employment, but that does not stop them from falling into poverty.

WESO 2016 finds that the incidence of relative poverty has increased by one percentage point in the European Union, since the start of the crisis.

“Clearly, the Sustainable Development Goal of ending poverty  in all its forms everywhere by 2030 is at risk,” said ILO Director-General Guy Ryder. “If we are serious about the 2030 Agenda and want to finally put an end to the scourge of poverty perpetuating across generations, then we must focus on the quality of jobs in all nations.”

“Right now, while 30 percent of the world is poor, they only hold 2 percent of the world’s income,” said Raymond Torres, ILO special advisor on social and economic Issues. “Only through deliberately improving the quality of employment for those who have jobs and creating new decent work will we provide a durable exit from precarious living conditions and improve livelihoods for the working poor and their families.”

The study also finds that high levels of income inequality reduce the impact of economic growth on poverty reduction. “This finding tells us that it is past time to reflect on the responsibility of rich nations and individuals in the perpetuation of poverty. Accepting the status quo is not an option,” says Torres.

Fragile and uneven progress

The ILO estimates on poverty reduction come after a sustained period of global progress, with the share of population living in extreme poverty falling from 46.9 percent in 1990 to just under 15 percent among 107 emerging and developing countries. When the moderately poor are considered, the rate has fallen from 67.2 percent to 36.2 percent.

But the data demonstrates that progress on poverty has been uneven. Poverty has declined rapidly in middle-income countries, especially in the Asia and Pacific region, but by a much lesser extent in low-income countries, where 47.2 percent of people remain in extreme poverty. In developed countries poverty has in fact increased in recent years, notably in the European Union.

Further, despite the significant overall progress in reducing extreme poverty, WESO 2016 warns that continued poverty reduction is threatened not only by weak economic growth but by key structural obstacles to quality employment creation.

Recent deterioration of economic prospects in Asia, Latin America and the Arab region and natural resource rich countries has begun to expose the fragility of employment and social progress. In some of these countries income inequality has begun to rise after decades of declines, raising the possibility that progress on poverty might be at risk.