ILO calls for faster job creation to combat 4.5-mn job losses from eurozone austerity
11 Jul 2012
The eurozone risked losing 4.5 million more jobs over the next four years, if it did not shift away from austerity, the International Labour Organisation (ILO) has warned.
That rise would see the number of unemployed in the 17-nation bloc at 22 million.
According to the organisation, a concerted policy shift away from austerity towards job creation was needed.
It added the trouble was not limited to the eurozone alone but was a global phenomenon. The report added that all 17 countries in the eurozone would suffer - the stressed economies and as also their healthier counterparts.
ILO director-general Juan Somavia said, unless targetted measures were taken to increase real economy investments, the economic crisis would deepen and the employment recovery would never take off.
The report added that for young people the consequences of a longer period of austerity would be particularly severe.
It added unemployment had not been as bad in the downturn so far, as it might have been as some companies were retaining staff in hopes of a recovery.
It warned, if their expectations did not come true, worker retention might become unsustainable, resulting in significant jobs losses.
The ILO has called for the following measures to address the issue:
- Support to financial system to be made conditional on the resumption of lending to small businesses
- Shareholders should be made to pay for the bailouts of banks
- Unemployed young people should be guaranteed training, education or work placements
- Changing pay levels in different eurozone countries to address differences in productivity.
The eurozone unemployment rate hit 11.1 per cent in May, according to official figures from Eurostat taking the total number of jobless people to 17.56 million, the highest level since records began in 1995.
In Spain, where unemployment rate was the highest in the eurozone, one person in four people was now out of work. The youth unemployment rate in the eurozone was 22.6 per cent in May, which meant 3.4 million people under the age of 25 were jobless.
