labour market Current Affairs - 2019
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The World Bank-ILO report titled Exports to Jobs: Boosting the Gains from Trade in South Asia has been released. The report studies the effect on local employment and wages of changes in exports by combining disaggregated data from household-level or worker-level surveys with trade data from India and Sri Lanka.
Key Observations made in the Report
- Increasing exports together with leading to better jobs and higher wages in India will generate more formal sector employment for youth and women.
- Increasing exports would boost average wages and the biggest beneficiaries of this wage gain would be the high-skilled, urban, more experienced, and mainly male workers.
- For low-skilled workers, there would be an increase in formal jobs.
- Exports can improve the performance of local labour markets. Hence labour market policies must aid different groups of workers to acquire the right skills and ensure that the gains of increased exports are shared more broadly across society.
India and Boosting Exports
- India’s growth rate of 7.2 per cent in 2017 reduced the number of people living in poverty.
- Even then, most Indians doesn’t have regular jobs in the formal economy and differences in wages across regions and in the quality of employment opportunities prevail.
- India’s trade has been reduced from 55.8 per cent in 2012 to 41.1 per cent of the Gross Domestic Product between in 2017.
- Indian exports which are mainly capital intensive like chemicals and fabricated metals reduces the direct benefits to workers.
- The report notes that India can ensure that greater export orientation can boost workers’ gains from trade and spread them more widely, so benefiting disadvantaged groups.
The report also concludes that more exports can create benefits for workers by raising wages and reducing informality and this requires stronger policies to ensure these benefits reach everyone in the labour market and don’t leave any groups behind.
The International Labour Organisation has released the annual World Employment and Social Outlook Trends for the year 2019. The important features of the report are:
- Unemployment rates were anticipated to fall to 4.9% in 2019 and are expected to hold steady into 2020.
- The number of jobless in real terms is estimated to rise from 172 million to 174 million in that time as the labour market expands.
- The unemployment rate increased from 5 to 5.6% between 2008-9, as the fallout of the near total collapse of major markets took hold.
- The report lamented the fact that it had taken nine years to recover from the shock of the 2007/8 global financial crisis.
- The report presents concerns about the female workforce participation rate. The much lower labour force participation of women at 48%, compared with 75% for men means that around three in five of the 3.5 billion people in the global labour force were men.
- After a period of rapid improvement that lasted until 2003, subsequent progress on closing the gender gap in participation rates had stalled.
- 2 billion of the 3.3 billion people in the global labour market worked in informal employment which put their economic security at risk.
- The poor quality of many jobs also resulted in the fact that in 2018 more than one-quarter of workers in low and middle-income countries were living in extreme or moderate poverty.
- The global unemployment among young people (between 15-24) stood at 11.8 per cent, higher than other age brackets.
- The report notes that in line with a stable aggregate unemployment rate, the outlook for men, women and young people with regard to opportunities on the job market is also very stable and further adds that neither the gender disparities nor the labour market challenges faced by young people are expected to abate in the coming year.
- Youth participation in the labour market had been declining steadily for the last 25 years and one of the main causative factors for this was more young people were entering further education.
The report also notes that around 114 million children aged between 5-14 involved in the global labour market and 73 million of them were working in hazardous conditions, according to data from 2016.