50 MILLION WORKERS MAY LOSE JOBS IF CRISIS WORSENS, WARNS ILO

Aruna Viswanatha, New Delhi
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As many as 50 million workers could be left without jobs in 2009 if the economic crisis worsens, the International Labour Organization, or ILO, said.

Unemployment this year could increase by between 18 and 50 million, the United Nations agency that works for labour rights said in a report released on Tuesday. ILO says the unemployment rate is likely to rise between 6.1% and 7.1% in 2009, compared with 5.7% in 2007.

In a warning to India’s workers, the ILO report suggests the worst hit might be the “working poor”, those who earn less than $2 (or Rs 97.80) a day, and workers in “vulnerable employment”, a term that characterizes insecure employment and low productivity.

The largest share of the newly unemployed comes from developed economies, which shed 900,000 jobs in 2008. But the layoffs that began in US financial firms and spread to retail, automobiles, manufacturing, consumer goods and information technology, are now triggering aftershocks in developing economies.

In the worst-case scenario, where the unemployment rate could rise to 7.1% in 2009, the report says almost 1.4 billion of the world’s workers may become part of the working poor, many of whom live in India and South Asia.

In 2007, four-fifths of South Asia’s workforce were classified as working poor, with almost 60% earning less than $1.25 per day.

According to some scenarios, the report argues, 95 million additional workers in South Asia could fall back into extreme poverty this year.

Any such downward spiral would put the brakes on dramatic growth, since South Asia accounted for 33% of all the new jobs created in world in 2008, the report says. Its nearest competitor sub-Saharan Africa accounted for an additional 21%.

Separately, new data suggests Indian employers are already tapping on their brakes. A quarterly employment survey released on Tuesday by staffing firm TeamLease Services Pvt. Ltd identifies telecom as the only industry showing signs of hiring growth in India. The ILO report shows that South Asia still boasts a relatively low 5.4% unemployment rate.

North Africa tops that list, at 10.3%, followed by the Middle East, at 9.4%. In sub-Saharan Africa, 7.9% of workers are unemployed, and in East Asia, the region with the lowest unemployment rate, only 3.8% of the workers is looking for jobs. Employment by sector in South Asia mimics global patterns.

The service sector now employs 43% of the world’s workforce, and 30% of South Asia’s. Agriculture, which employed almost 41% of the workforce 10 years ago, is down to 33.5% worldwide.

South Asia’s share has dropped from 60% to 47%.