Toward a brighter jobs outlook ILO report: Economists see good employment prospects, with right policies in place.

December 06, 1996

UNEMPLOYMENT rates have dipped below 5 percent in the United States. But that good news is an exception. According to a new International Labor Organization report on world employment, some 34 million people are unemployed in the world's wealthiest nations. In the European Union, unemployment last year averaged 11.3 percent of the work force. And in many parts of the world, underemployment and poverty are a growing problem.

It doesn't have to be this way, ILO economists argue. Contrary to those who predicted an "end of work" as technology takes over (( many tasks formerly done by people, their study finds that economic changes are bringing no significant drop in the growth of jobs, or in the number of solid, well-paying jobs.

The statistics on job tenure -- length of time workers spend in jobs -- show slight declines in only two of the world's eight leading industrialized countries that track such things. Surprisingly enough, the rate in the United States remained stable, once employment figures were adjusted to account for the economic cycle.

The report argues that policy makers ought to take a new look at their distrust of "full employment" policies, suggesting that high employment rates need not ignite inflationary pressures. High rates of unemployment produce a drag on the economy, as fewer people are able to purchase goods and services and as the social pathologies surrounding poverty and unemployment take their toll.

The report suggests several ways governments can increase hiring. These include reducing payroll taxes and other burdens on employers and instituting programs that boost incomes of lower-paid workers, such as the Earned Income Tax Credit in the U.S.

In the years after World War II, many countries assumed that full employment was not only possible but desirable. Later, most governments retreated from this position. The ILO has offered a provocative argument that this pessimism is not only degrading to people who yearn for full-time work, but that it also creates an unnecessary drag on economic growth. In other words, if more people can afford to participate in the economy, the world can sustain higher rates of growth and more people will benefit.

Pub Date: 12/06/96

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