Thursday, October 9, 2014
A recent conference organized by the JustJobs Network (JJN) in Washington, D.C. focused on charting out an agenda for “inclusive growth” – an aim that has found its way into the rhetoric of governments, development agencies, and international financial institutions. An effective and sustainable agenda for inclusive growth must center on creating jobs with appropriate remuneration, basic rights, and opportunities for economic mobility. Only by considering the jobs dimension of key social and economic phenomena – trade and investment, migration, demographic shifts, and climate change – can countries fashion an economic model that is truly inclusive and sustainable.
The conference, “Just Jobs: A New Agenda for Inclusive Growth”, was co-hosted by the Royal Norwegian Embassy in Washington, D.C. Held on October 9, 2014, the event facilitated policy dialogue among a diversity of stakeholders and showcased several new reports by the JustJobs Network:
The research released by JustJobs Network in its first year, and the discussions facilitated in Washington, serve as this young institution’s contribution to an ongoing dialogue on how economies must grow differently. As an organization committed to empirical research, our role lies in studying the connection between employment and the other social and economic challenges shaping the 21st century. Moreover, we see ourselves as conveners, bringing together a wide diversity of stakeholders that influence the process of more and better job creation for debate, dialogue and knowledge sharing.
“Just Jobs: A New Agenda for Inclusive Growth,” which marked the first anniversary of JJN, was an initial step – or perhaps a leap – toward fulfilling this role as researcher and convener.
The aim of our discussions was to envision next steps for the jobs component of the inclusive growth agenda. The five key messages outlined here will serve as action items to move this agenda forward in 2015.
1. Policymakers must treat jobs as the key indicator of macroeconomic health
Work is fundamental to people’s well being, and global leaders are increasingly realizing that it is fundamental to the well being of economies, too. Those who once considered jobs more of a social rather than economic concern have realized that 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. The consensus is growing 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.
Despite this recognition, jobs have yet to enjoy the same treatment as other indicators of economic health. The financial crisis unveiled the limitations of using metrics like Gross Domestic Product (GDP), or indices that measure competitiveness and the ease of doing business, as proxies for economic opportunity. But politicians, policymakers, and the private sector still look to these measures alone because they lack a more sophisticated tool for analyzing performance on the economic indicator that matters most to ordinary people: jobs.
It is within this context that JustJobs Network and Fafo Institute for Applied International Studies have developed a comprehensive, data-driven approach to measuring the quantity and quality of jobs around the world. The first-ever global measurement of quantity and quality of jobs, the JustJobs Index – released at the October 2014 JJN conference – broadens the discourse on employment beyond the incomplete metric of unemployment. The Index ranks countries on three dimensions – employment, social security, and gender equality.
The JJI is an important step in moving the dialogue on macroeconomic policy toward employment. Further progress will require active engagement from a diversity of stakeholders, including the private sector, in both improving the JustJobs Index and utilizing it as a reference point when assessing the performance of national economies.
2. A lack of reliable data hinders smart policymaking on labor and employment
There is an abundance of data on global capital flows, foreign investment, and Gross Domestic Product, but national and global policymakers face a severe lack of reliable data when it comes to tracking jobs – especially the quality of jobs. Current researchers rely on data compiled and harmonized by the International Labor Organization from national labor force surveys. But even when data is available, it is not collected frequently enough or with a consistent methodology at the national level. JustJobs Network and Fafo found data to be the biggest obstacle in constructing the JustJobs Index.
Without, for instance, solid data on wages or collective bargaining, those who create policy lack the information to understand its effectiveness. Compounding the problem, the countries where labor market phenomena are evolving most quickly – emerging and developing economies – face the largest data gaps.
In order to bridge the gap in measuring quality and quantity of jobs, a wider international effort is required. JustJobs Network and those who gathered in Washington urge the international community to make better data on inclusive growth indicators a global priority. Specifically, country-level data on wages, rights at work, and workplace safety are among the most important metrics for which little data exists.
Conference participants proposed that platforms of international policymaking be used to build momentum behind better data collection. A post 2015 sustainable development agenda, beyond setting new development goals, will also set a global agenda for data collection. If the new agenda prioritizes indicators of inclusive growth that provide insights into labor market conditions, this increased emphasis will drive more and better data collection on quality of work.
The G20 is another possible forum. Ministers from the world’s biggest industrialized and emerging economies could collaborate in ensuring employment related data is collected more frequently than through current national labor force surveys, using a standardized methodology and made freely available.
As several conference participants highlighted, cost of data collection is not the biggest hurdle. In fact, labor market surveys are not prohibitively expensive. The international community, spearheaded by the International Labor Organization, can help national governments develop the capacity and garner the resources to collect data on critical jobs indicators.
Political will is a larger obstacle, which is why a movement for more and better collection of data on inclusive growth indicators – including quality of work – is required.
3. Private sector perspectives must inform the movement for more and better jobs
The final session at the JJN October conference asked private sector stakeholders to weigh into the debate on more and better job creation. The panel was comprised of senior businesspeople from Corning Incorporated, Norfund, and Tata. What do companies need, we asked, to make responsible investments that create new high-quality forms of employment?
Their responses highlighted the need to bring private sector voices into policymaking on both job creation and labor rights. Regulatory regimes meant to safeguard workers’ rights, they said, are not unwelcome by private sector firms. Companies, especially in developing and emerging economies, end up skirting these laws because of the way they are written and enforced. Regulatory reform, they argued, is not about de-regulation, but instead about streamlining existing laws, removing antiquated regulations, and making enforcement transparent and consistent.
Moreover, these company representatives emphasized the critical importance of two other themes that had emerged throughout the conference: skills and infrastructure. When companies are deciding where to produce, a skilled workforce and advanced infrastructure are major factors under consideration. Tax incentives may encourage companies to produce in a particular location, but those investments may not create as many jobs if companies are forced to mechanize aspects of the production process due to lack of skilled labor.
4. Young people require not only jobs, but career pathways
The urgency of the youth employment crisis cannot be overstated. Before 2020, an additional 1.1 billion youth will enter the working age population – 90 percent in the Global South – but employment growth throughout the world remains anemic. When people begin adulthood without work, they earn lower wages and are more likely to experience sustained periods of unemployment throughout their lives.
A lack of productively employed young people threatens the sustainability of already imperiled social welfare schemes, especially in the aging countries of Europe, East Asia and North America where the demographics are increasingly lopsided. Emerging economies like India and Indonesia, predicted to reap the benefits of a “demographic dividend” over the next two decades, may in fact face a demographic disaster as the working age population grows much faster than the number of available jobs.
In this context arrives a new JJN report – Overcoming the Youth Employment Crisis: Strategies from Around the Globe. A session at the October conference utilized the report as an anchor for discussing the strategies currently being deployed around the world to improve young people’s job prospects. The discussion generated consensus around a few points, principal among them the fact that young people require not only jobs, but career pathways – that is, not just a job today, but an employment opportunity that presents them with a route toward a productive adult life.
While some governments are applying quick fix, band-aid solutions that get young people into jobs quickly and reduce the alarming rates of youth unemployment, these strategies will only succeed if they are combined with policies that give young people the tools to build successful careers in the long term. For example, many countries are experimenting with youth wage subsidies to incentivize employers to hire young workers; these programs will have a sustainable impact only if they enable youth to gain skills for which employers will eventually pay full price. At the same time, vocational education programs must also be carefully implemented and monitored, as some have the tendency to “store” rather than train young people.
Youth aspirations must also be kept in mind. When youth are funneled into jobs they do not want, the result is high turnover rates, which in turn affects the productivity of their employers. With limited and interrupted work experience, these young people fail to develop the skills necessary to work in high-productivity professions.
Furthermore, the report and our discussions in Washington touched on the need to ground policy in an understanding of the social and economic circumstances that push young people into poor quality employment or leave them jobless. For instance, many youth fail to complete their education because their poor families require them to leave school and work; in turn, their long-term prospects for a high-quality job are circumscribed. In a different vein, many young people enter the labor market with social and cultural stigmas attached to them that limit their job search more than lack of qualification. A job or skills training strategy alone – without a concurrent vision to address these barriers – will be inadequate to improve youth employment outcomes.
As government, civil society, and the private sector are all crucial in addressing the youth employment crisis, coordination among them is imperative. Employers, for instance, depend on government vocational institutes that give young people market-aligned skills. And both the public and private sector depend on civil society to spread awareness and connect young people with educational and occupational opportunities.
These lessons, drawn from the real experiences of governments and communities currently implementing diverse strategies to help young people in the job market, should guide the ongoing global response to the youth employment crisis. Urgent responses must build toward long-term solutions, at the level of policy and in the lives of young people.
5. Research and dialogue on labor migration – especially communities of origin – must be linked to the inclusive growth agenda
Economic integration – characterized by trade and global value chains, cheaper and quicker transportation, and increasing flows of capital and investments – is prompting people to cross borders in pursuit of new employment opportunities. As a result, the landscape of human mobility has grown more complex – with new South-South migration patterns, the proliferation of labor recruitment firms, and a rise in temporary contracts. The changing landscape warrants new research on the linkages between emergent trends in migration and the broader aims of social and economic development.
During the conference, JJN launched an original documentary entitled “Pulang Pergi” (Bahasa Indonesia for “Going Home to Leave Again”). The documentary explores the impact of labor migration on communities of origin in Indonesia, and raises the following questions: Does labor migration stimulate local economic development in communities of origin? How can the resources migrants bring back to sending communities be harnessed to create local employment opportunities? It is well documented that labor migration can stimulate economic growth in communities of origin, but less understood is whether that growth is inclusive.
Given the steadily increasing number of transnational migrants, these questions are crucial to address. In 2013, 232 million people, or 3.2 per cent of the world’s population, were international migrants, compared with 175 million in 2000 and 154 million in 1990. Countries that pursue migration as a development strategy must aim not simply to maximize remittance flows but rather to facilitate investment of remittances in local job-creating economies.
The documentary is a preview of primary research undertaken by JJN in Indonesia. In 2015, the research report will be released along with policy recommendations to the Indonesian government and stakeholders elsewhere in the world working in countries of origin.