ILO: 'Early Exit' from Stimulus Measures Could Prolong Jobs Crisis
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An "early exit" from support measures adopted in response to the global economic crisis could postpone a jobs recovery for years and render the fledgling economic upturn "fragile and incomplete," the International Labor Organization (ILO) said on Monday.
In its annual World of Work Report, the UN agency also projected that unless adequate measures are adopted and in some cases continued, more than 40 million people worldwide could drop out of the labor market.
"Despite some initial signs of economic upturn and because of the significant rise in unemployment and in part time work, support measures should not be withdrawn too early," said Raymond Torres, director of the ILO's International Institute for Labor Studies and lead author of the report.
"The global jobs crisis is not over," he added. "It is therefore crucial to avoid premature exit strategies. In short, the economic upturn will remain both fragile and incomplete as long as the jobs crisis continues. A real recovery will be achieved only when employment recovers."
The report also pointed out that most of the failures of the financial system that lie at the root of the present crisis have not been tackled so far -- another reason why early exit would be premature.
It added that bringing persons back into productive employment sooner would be less costly for the public purse than taking action later.
According to the report, a continuation of fiscal stimulus measures, if well focused on jobs, would raise employment by 7 percent compared to an early exit situation.
It forecasted that that employment in high GDP per-capita countries may not return to pre-crisis levels before 2013, unless more decisive measures are taken to stimulate job creation. In emerging and developing countries, employment levels could start recovering from 2010, but may not reach pre-crisis levels before 2011.
"Clearly, what we have on our hands is a situation that could become critical in the long-term unless we concentrate on promoting jobs and helping those who have lost theirs," Torres said.
"This crisis is not just about people who have lost their jobs but also about people who have no options but to keep on looking for one," he added.
(Xinhua News Agency December 8, 2009)