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The Actuary The magazine of the Institute & Faculty of Actuaries

Unemployment to rise by 3.4 million globally in 2017

The global unemployment rate is expected to rise by 0.1% this year representing an increase of 3.4 million in the number of people without work according to the International Labour Organization (ILO).

Challenges in Sub-Saharan Africa ©iStock
Challenges in Sub-Saharan Africa ©iStock

Their World Employment and Social Outlook – Trends 2017 report forecasts there to be a further rise of 2.7 million unemployed in 2018, with the current amount of jobless people standing at just over 201 million.

This is putting governments under extreme pressure as the pace of labour force expansion outstrips job creation, with global GDP growth hitting a six-year low in 2016 at 3.1%.

ILO director-general, Guy Ryder, said: “We are facing the twin challenge of repairing the damage caused by the global economic and social crisis and creating quality jobs for the tens of millions of new labour market entrants every year.

“Economic growth continues to disappoint and underperform – both in terms of levels and the degree of inclusion. This paints a worrisome picture for the global economy and its ability to generate enough jobs, let alone quality jobs.

The report shows that these challenges are particularly acute in Latin America, the Caribbean and Sub-Saharan Africa, with both regions confronted with a strong increase in the number of people entering working age.

Unemployment statistics by region are shown below:

Source: ILO
Source: ILO

This is in contrast to developed countries where unemployment is expected to fall in 2017, with the rate down to 6.2%, although there are signs that the pace of improvement is slowing.

It is also thought that vulnerable forms of employment, such as contributing family workers and own account workers, will stay above 42% of total global employment this year, accounting for 1.4 billion people worldwide.

“Almost one in two workers in emerging countries are in vulnerable forms of employment, rising to more than four in five workers in developing countries,” ILO senior economist and lead report author, Steven Tobin, said.

Another trend found was the reduction in working povery slowing, with the number of people earning less than $3.10 (£2.54) per day expected to increase by more than five million over the next two years in developing countries.

In addition, it was observed that between 2009 and 2016 the share of the working age population willing to migrate increased in almost every region of the world, due to a lack of decent jobs and global uncertainty.

There are now calls for international co-operation, with estimates suggesting that a coordinated effort to provide fiscal stimulus and increased public investment could reduce global unemployment in 2018 by almost 2 million.

Tobin added: “Boosting economic growth in an equitable and inclusive manner requires a multi-facetted policy approach that addresses the underlying causes of secular stagnation, such as income inequality, while taking into account country specificities.”