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15 October
2014

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Just Jobs and Employing Workers: The Case for a New Index


Bama Athreya

A robust set of discussions on the topic of ‘job rich’ growth took place in the context of the Fall 2014 World Bank/IMF meetings.  These discussions were timely in the wake of the dramatic evidence regarding persistent unemployment, highlighted earlier this year by the ILO’s Global Employment Trends Report.  The release of the updated Just Jobs Index makes a timely contribution to this policy dialogue.

The “Employing Workers” index continues to be used by many countries to benchmark their own progress toward employment generation.  Yet, the indicators, part of the overall World Bank “Doing Business” index, were notably criticized in the 1990s for proposing that governments weaken freedom of association and other rights protections in the name of creating a more ‘attractive’ investment climate.  The indicators were subsequently revised, and the Bank has re-oriented its thinking from ‘flexibilizing’ labor markets to ‘improving labor regulation’- a formulation that can encompass both strengthened rights protections and a more streamlined business environment.  The Bank’s new Social Protection and Labor policy notes particularly the importance of labor and social protection programs to ensuring the resilience of developing countries.

Nevertheless, the “Employing Workers” index remains normative rather than data-driven.  It evaluates the rigidity of legal frameworks, yet there is no data regarding the direct impacts of any specific changes in law on actual employment figures.  Indeed the index lacks a metric to analyze even whether legal frameworks are appropriately supported by the administrative mechanisms needed for their consistent application.  Thus, the index begs the question as to whether job-rich growth is indeed promoted by any of the suggested measures to changes in law.

Into this debate comes the revised Just Jobs Index.  The indicators are empirical rather than normative- the index does not take a position on policy prescriptions to promote employment; instead, it provides a practical approach to governments seeking to benchmark whether they are in fact making progress toward the expansion of employment.

The JJI takes a disciplined approach to the selection of indicators.  Even the newly-released, enhanced index remains sharply focused on a handful of indicators, half of which are related to employment.  These include the labor force participation rate, GDP per capita, and average monthly wages.  The other half of the index contains indicators on the topics of social protection, social dialogue, and gender equality.  JJI makes the interesting choice to give the gender equality indicators fully a third of the weighting contributing to countries’ overall ranking.

Without taking on the challenges of normative, rights-based indicators, the JustJobs Network nevertheless makes a useful contribution to the debate regarding the relevance of workers’ rights in the discussions of ‘job-rich’ growth.  By measuring gender equality and the presence of social dialogue, and linking these indicators with measurement of a country’s overall progress toward increasing wages and reducing inequality, JJI makes its quiet contribution to the data to support the proposition that, as the ILO’s Declaration on Fundamental Principles and Rights at Work asserts, economic growth is “essential but not sufficient to ensure equity, social progress and the eradication of poverty.”

 

 

About the Author

Bama Athreya is a global labor specialist in USAID’s Center of Excellence on Democracy, Human Rights and Governance, overseeing global grant portfolio on labor and providing technical and strategic support to USAID policy and programming worldwide.


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