Unemployment is on the rise as economies around the world lose jobs and a record 202 million people could be unemployed across the world in 2013, the International Labour Organisation (ILO) has said.
Five years on from the onset of the financial crisis, the fragile recovery is threatened by “incoherent monetary policy” in the US and Europe, the ILO said, according to The Guardian.
According to United Nation’s agency’s latest report, Global Employment Trends 2013, six percent of the world’s workforce were without a job in 2012. The number of jobless people around the world rose by four million in 2012 to 197 million.
Young people were the worst affected: nearly 13 percent of those under 24 were unemployed. Some 35 percent of all young unemployed people have been out of work for six months or longer in advanced economies, up from 28.5 percent in 2007.
“This is a massive waste of the lives of young people and their talents would damage the people themselves and their societies, even if stability were not to be affected,” said ILO chief Guy Ryder.
The situation is being exacerbated by “incoherent monetary policy”, in the world’s largest economies (the G20), the ILO said.
“In comparison with the crisis years of 2008 and 2009, the stance of monetary and fiscal policies in G20 countries has lost coherence, thereby increasing uncertainty and limiting policy effectiveness to support the recovery,” the report said.
The global economy is expected to show a modest gain in 2013, with output up 3.6 percent compared to 3.3 percent in 2012. But this fragile recovery is threatened by political uncertainty on both sides of the Atlantic that threatens recovery worldwide, the ILO added.
In the US, the recovery is being challenged by negotiations over the debt ceiling, and spending cuts associated with the fiscal cliff. In Europe, a modest recovery is dependent on the ability of political leaders to “establish credible policies to promote fiscal integration of Euro-area economies”.
“Incoherence between monetary and fiscal policies adopted in different countries and a piecemeal approach to financial sector and sovereign debt problems, in particular in the euro area, have led to uncertainty weighing on the global outlook,” said the report.
“Investment has not yet recovered to pre-crisis levels in many countries. The indecision of policymakers in several countries has led to uncertainty about future conditions, and reinforced corporate tendencies to increase cash holdings or pay dividends rather than expand capacity and hire new workers.”
The world’s advanced economies were the epicentre for the financial crisis and have been the hardest hit, accounting for half of the total increase in unemployment of 28 million since the onset of the crisis.
But developing economies are now being hit by the double dip in some of the world’s advanced economies, said the ILO. Advanced economies lost another 1 million jobs in 2012, while three million were lost in other regions, especially hard hit were east Asia, South Asia and sub-Saharan Africa.