Sabina Dewan and Greg Randolph
This piece was originally published by Huffington Post.
The International Monetary Fund that once sidelined jobs as a domestic, social issue – focusing on Gross Domestic Product, debt and fiscal rebalancing – now recognizes that employment is among the most important macroeconomic indicators. This is a promising step for the world’s leading financial institution to take – one that organizations such as the JustJobs Network have been advocating since the onset of the financial crisis.
The International Jobs Report, released on Wednesday by the IMF and EIU, comes with a comforting headline: global unemployment has returned to its pre-crisis level, falling to 5.6 percent in 2014. But it is “too soon to declare victory” cautions the IMF’s Prakash Loungani.
Employment growth worldwide stands at a sluggish 1.5 percent a year – much slower than the pre-crisis level of approximately 2.5 percent. The global economy only created roughly 208 million jobs over the last five years. Meanwhile, the global working age population continues to balloon. Projections estimate that between 2012 and 2020, 1.1 billion youth will enter the working age population.
Creating enough jobs to absorb new entrants into the labor market is an urgent challenge, but equally pressing is the need to stem the erosion in job quality. Approximately half of the global workforce labors in the informal sector – without a contract or a voice at the workplace. And even those in the formal sector increasingly find their wages stagnant and benefits stripped away.
In their report, the IMF and EIU acknowledge that the quality, in addition to quantity of jobs, is part of the employment challenge confronting the global economy. The report inaugurates a quarterly Global Jobs Index that looks at the quantity of employment, but it points to the value of the JustJobs Index (JJI) for measuring job quality.
The JJI – developed by JustJobs Network and Fafo Institute for Applied International Studies – is the first-ever global measure of countries based on both quantity and quality of jobs. The JustJobs Index ranks 148 countries on three dimensions: employment, social security, and gender equality.
The creation of more and better jobs remains one of the most critical issues facing the international community, but the IMF report represents the first step toward addressing it: recognition by global financial institutions that jobs are not only a social concern for individual governments to grapple with, but an economic concern of critical importance to the global economy. A lack of employment constricts aggregate demand and hinders economic expansion; in other words, good jobs are the prerequisite for any economy to remain healthy in the long run.
With international metrics like the Global Jobs Index and the JustJobs Index, the dialogue is shifting toward recognition that those who power the global economy – workers – must themselves be empowered, with “just jobs” – complete with appropriate remuneration, rights at work, social protections and opportunities for economic mobility.