By Dr. Gyan Pathak
International Labour Organization (ILO) has categorically told the World Bank and International Monetary Fund (IMF) that social justice is indispensable in protecting the workforce since inequality has been growing worldwide. The importance of the statements lies in the fact that these have been delivered at a time when the world labour market is likely to suffer further due to estimated economic deceleration in 2023.
The World Bank and IMF Spring Meetings are being held in Washington to deal with the growing risks arising out of the spectre of deceleration which is making the cost-of-living crisis worse for common people. Rising prices and inflation, worsening unemployment level, and declining job opportunities has emerged as major concerns.
Moreover, growing inequality has been threatening social restiveness around the world, while labour market distortion is set to worsen further due to weakening of the economic growth and introduction of automation and Artificial Intelligence as against human centric growth for which the UN has been urging the world since disruptions caused by the COVID-19 pandemic in 2020. World is still far away from the human centric economic development.
Global employment growth stands to be only 1 per cent in 2023, which is less than half the level in 2022. Global unemployment is projected by ILO to rise slightly in 2023, by around 3 million, to 208 million (corresponding to a global unemployment rate of 5.8 per cent, which means that global unemployment will remain 16 million above the 2019 pre-crisis benchmark.
There are also interlinked crises in purchasing power, ecological sustainability, and human well-being. Pandemic has exacerbated income insecurity around the world, particularly for more than half of the global population without any access to social protection, including 2 billion workers in the informal economy.
It is in this backdrop, the ILO Director-General Gilbert F Houngbo has highlighted the need for social justice to overcome the challenges facing economies and societies across the globe and called for coherent multilateral action to strengthen the social dimension of sustainable development and economic growth.
“Social justice makes societies and economies function more cohesively and productively by reducing poverty and hunger, inequalities, and social tensions. Given its central importance to inclusive and sustainable socio-economic development, social justice should be seen as one of the cornerstones of the renewed multilateralism that is required to overcome current challenges,” ILO-DG Houngbo has said.
Two separate statements have been made by the ILO-DG – one to the IMF’s International Monetary and Financial Committee, and the other to the World Bank’s Development Committee outlining the gloomy global economic, social and environmental outlook, the impact of the cost-of-living crisis, the need for a just transition to greener economies, and called for more international support for achieving universal social protection.
Referencing the findings of the ILO World Employment and Social Outlook (WESO): Trends 2023, the statements pointed to the global economic slowdown, which is likely to force more workers to accept lower quality, poorly paid jobs. Women and young people are faring “significantly worse” in labour markets. The labour participation rate of women is under 48 per cent globally compared to the male rate of up to 72 per cent. The worse, the unemployment rate of young people is three times that of adults, with more than one in five not in employment, education or training (NEET).
The gap between wage growth and labour productivity growth, and the need for real wages to increase to catch up with inflation and become aligned with productivity growth, has also been highlighted.
“Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained. In addition, a much-needed post pandemic recovery could be put at risk. This could fuel further social unrest across the world and undermine the goal of achieving prosperity and peace for all. There is an urgent need to apply well-designed policy measures to help maintain the purchasing power and living standards of wage workers and their families,” it was pointed out.
Houngbo called for a revival of development finance, combined with a reshaping of business incentive structures to encourage long-term investments in the real economy.
Describing universal social protection as a “human right and a state responsibility”, he called on the international community to “support existing or new financing strategies which can mobilize additional resources, support better use of existing resources and enhance coordination between multiple domestic and international sources of finance.”
It has been argued that such actions would be aligned with the priorities of the UN Global Accelerator on Jobs and Social Protection for Just transitions, protecting the chronically poor and those who are most affected by multiple and overlapping crises.
It should be noted that the Global Accelerator on Jobs and Social Protection for Just Transitions was launched in September 2021 by the UN Secretary-General signalling the UN system’s collective response for addressing the multiple challenges that threaten to erase development progress. The aim was to direct investments to help create at least 400 million decent jobs, primarily in the green, digital and care economies, and to extend social protection coverage to the over 4 billion people currently excluded.
In addition, the statement made to the World Bank’s Development Committee has called on the World Bank Group to “position itself firmly” as a key partner of the Global Accelerator and for “stronger support for institutional deepening in other areas that affect inclusion and resilience, notably the capacity of countries to implement labour standards.” (IPA Service)
