SOCIAL DEVELOPMENT COMMISSION DISCUSSES LACK OF EMPLOYMENT, A PROBLEM AFFECTING ALL REGIONS, RICH AND POOR
Press Release
SOC/4416
SOCIAL DEVELOPMENT COMMISSION DISCUSSES LACK OF EMPLOYMENT, A PROBLEM AFFECTING ALL REGIONS, RICH AND POOR
19970226 Workers around the world were facing "employment stagnation" either in the form of unemployment or a reduction of the quality of employment, the Commission for Social Development was told this morning during a panel discussion on the priority theme of the current session, "productive employment and sustainable livelihoods".Isabelle Grunberg, Senior Policy Analyst, Office of Development Studies, United Nations Development Programme (UNDP), said that unemployment was affecting all regions of both the developed and developing world. Globalization and technological change were driving new export-oriented industries, but eliminating jobs in mature economic sectors.
Underemployment and reliance on precarious informal sectors was a growing problem in the developing world, according to Jesus Aguilar Cruz, Director General of Alternativa -- the Centre for Social Investigation and Public Education of Peru. While his country had enjoyed economic growth and positive macroeconomic indicators, growth had taken place in sectors which did not have high manpower needs. As a consequence, some 50 per cent of economic activity in the capital city of Lima was taking place in "micro-business" enterprises that provided little stability.
Opening the discussion, the Director of the Division for Social Policy and Development of the Department for Policy Coordination and Sustainable Development, John Langmore, described unemployment as the most powerful cause of poverty, inequity and exclusion, but also with the greatest capacity for the reduction of those disasters. He stressed that if the goal of full employment were placed at the heart of budgetary policy, public outlays would be concentrated where they maximized the quality and accessibility of services.
"Social development is impossible without full employment", Bill Jordan of the International Confederation of Free Trade Unions (ICFTU) told the Commission, praising its decision to open up its deliberations as a good first step. He pledged the cooperation of his organization in the quest to find out the root causes of poverty and unemployment.
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During the discussion with panellists, some delegations pointed out the obstacles to the informal sector and to employment, especially in the developing and transitional economies, inquiring about ideas and proposals. Other subjects of interest included the impact of globalization on domestic labour markets and the technological requirements of the informal sector.
Ashraf Tabani, of the Employer's Federation of Pakistan, also took part in the panel discussion.
Also this morning, the Commission elected Santiago Apunte Franco (Ecuador) as its Vice-Chairman cum Rapporteur. The Commission also decided that Julia Tavares de Alvarez (Dominican Republic) and Aurelio Fernandez (Spain) would serve as joint chairmen of its working group on ageing.
The Commission will meet again at 3 p.m. today to continue its deliberations.
Commission Work Programme
The Commission for Social Development met this morning to continue its consideration of the follow-up to the World Summit for Social Development, by holding a panel discussion on the priority theme of the session: "productive employment and sustainable development".
Discussion
JOHN LANGMORE, Director, Division for Social Policy and Development, Department of Policy Coordination and Sustainable Development, opening the panel discussion, described the issue of unemployment as "the most powerful cause of poverty, inequity and exclusion, and also the issue with the greatest capacity for the reduction of those disasters". He noted that it would not be redundant to argue for placing growth of employment at the centre of economic and social policy. National employment strategies must have scores of components, covering such areas as government expenditure and tax policy, access to credit and the level of interest rates, prices and income policy, as well as industry and labour-market policy.
He stressed that said if the goal of full employment were placed at the heart of budgetary policy, public outlays would be concentrated where they maximized the quality and accessibility of services. In addition, real interest rates were high in comparison with the past and that put a strong constraint on investment by business, adding to the debt-servicing costs of governments. It was crucial that a conscious goal of national monetary policy and of international monetary cooperation be minimization of interest rates to the extent that other goals allowed. While it was clear that people everywhere wanted more attention on growth of employment, it had not been a common issue for discussion at the United Nations.
The current discussion was the first at the United Nations in New York principally on employment, the reason being that employment naturally received attention at the International Labour Organization (ILO), he said. Yet, the goal of full employment was embedded in the Charter of the United Nations and of the organizations of the United Nations system, including the International Monetary Fund (IMF).
BILL JORDAN, General Secretary of the International Confederation of Free Trade Unions (ICFTU) in Brussels, said that, for his organization, interdependence was a term with many sides and meanings. It was a catchword for organizations and peoples -- including labour and its employers -- working together. Noting that two thirds of the organization's members came from the developing world, he said it was ready to contribute the rich benefits of that diversity to the work of the United Nations reflecting those ideals of interdependence. He praised the decision of the Commission to open up its deliberations as a good first step towards bringing dynamism to the
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international system, but warned that there was a tendency for bodies such as the Commission to fall into complacency, forgetting the task for which they had been set up. The international trade union movement was set up to help the process of people moving forward, he added.
He urged governments and the United Nations to collaborate with labour in solving economic problems, noting that people's sense of identity was bound up with what they did for a living. He said he was willing to volunteer the trade union movement in the service of the United Nations to find out the root causes of poverty and unemployment. Social development was not possible without full employment, and education and training had to be the focal points of employment policy. His movement had organized over 30 conferences that had led to broad agreement on how to ensure social progress, and he would like to see the inter-agency discussions and the exchange of views at the current session replicated at the national level. The Copenhagen World Summit for Social Development was a rich resource to be elaborated on in all countries.
ASHRAF TABANI, Employer's Federation of Pakistan, said that a paper submitted to the World Summit for Social Development by the International Chamber of Commerce and the International Organization of Employers had pointed out that strategies for sustained economic growth that result in job creation had several specific requirements: stable and consistent macroeconomic policies free of budgetary excess; policies that encourage the expansion of international trade and investment; policies and institutions which promote private investment; and flexible regulations that allow employers and workers to adapt.
Development policies should promote growth as a means of fighting poverty, but micro-economic intervention was needed to ensure that such growth increased productive employment. In recent years, the most promising avenues for productive employment generation had been small manufacturing, rural non- farm activities, the urban informal sector and services. He urged the Commission to study the role of education in stimulating economic growth and employment.
ISABELLE GRUNBERG, Senior Policy Analyst, Office of Development Studies, United Nations Development Programme (UNDP), said that unemployment was a problem worldwide. Globalization and technological progress were not directly responsible for the unemployment crisis, but they did affect it. No region was immune to unemployment; even Japan, the Republic of Korea and other fast- growing Asian economies were enduring the problem. In other territories, where unemployment levels were constant, there was a problem with the quality of employment. For example, in the United States and the United Kingdom, workers had not seen their real wages rise since the 1970s. Also, there was a rise in the number of jobs that provided no health care benefits. The world's labour force was facing a broad stagnation. Workers were facing either unemployment or a reduced quality of jobs.
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Globalization and technological change had multiplying effects, she said. While they positively affected economic growth by creating new industrial sectors, they also tended to eliminate jobs in existing industries. Expanded global trade would only enhance growth for all if countries coordinated the opening of their markets. Economic growth was being stimulated by factors outside the sphere of many national economies. In Europe and the United States, economic growth was being driven by export- oriented industries. That strategy should be pursued uniformly, so that healthy economies could absorb imports. Weak international demand was responsible for what some saw as the end of the east Asian economic miracle. All countries needed to enter into mutual guarantees so that they could jointly open their markets. A shift was taking place in the world economy by which social responsibilities were shifting onto governments. For example, the number of persons in the United States with private health insurance was diminishing, placing additional burdens on medicare and medicaid.
JESUS AGUILAR CRUZ, Director General, Alternativa -- the Centre for Social Investigation and Public Education of Peru -- said that macroeconomic progress in his country had not positively affected employment levels for most workers. The economy of Peru had been growing regularly since 1991, but growth had taken place in low value-added areas, such as mining and fishing, which did not drive employment. Growth should be directed towards those areas that would allow for increased levels of manpower. Macroeconomic stability was very important to economic growth, he said, stressing that micro-economic factors, however, were critical. Peru was enduring high rates of "underemployment" in which people worked at sub- standard wages. Also, unemployment and underemployment tended to concentrate on vulnerable sectors, such as young urban workers and women. Low-income workers in Peru were struggling both to survive and to escape poverty. Many had fallen back on nutritional support provided by local organizations. Large numbers of marginally employed workers were taking part in "micro-business" enterprises. Some 50 per cent of economic activity in Lima was located in the informal sector. The hope was that the micro-sector informal economy could absorb workers in times of economic slowdown in the formal economy.
The representative of Algeria said the Algerian labour leader, Abdelhak Ben Hamouda -- who had been referred to by Mr. Jordan -- was a hero who died for the people. He had been killed by terrorists, but would not be forgotten.
The representative of Jamaica said that the informal sector in her country was one of the areas of growth in job-creation. What was the potential for the small-scale enterprises in Peru, she asked Mr. Cruz, and what was required for the sector to grow? In addition, was there a scope and potential for cooperatives? On technology, there was a need for small machinery and implements for use in her country by the informal sector. What agencies or institutions were best suited for the development of those as they were very necessary for the growth of those businesses?
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Mr. CRUZ replied that "a micro-enterprise today could be a macro- enterprise tomorrow". He had always stressed the role of credit facilities for such businesses, and there was a possibility of growth for them if they could increase turnover. In his country, there was emphasis on solidarity and the support of one another, and that was sometimes helpful. In terms of technology, that was a substantive problem as not only machinery was required, but also other agricultural needs.
The representative of Ukraine asked Ms. Grunberg how she assessed the impact of globalization on the domestic labour market of the transitional economies. Mr. Cruz was also asked about employment conflicts, since as much as two thirds of the workforce in her country was said to be holding supplementary employment.
Ms. GRUNBERG said that the analysis of economies in transition had to be a little more refined in the area of supply. If the prices of supply were not right, inflation became an issue. She called for improving the legal framework and training so that suppliers in those countries could fulfil demand. Answering the question on supplementary employment, Mr. CRUZ said that people took second jobs because of low income. Technology should work in a different fashion, geared to the nature of the enterprise. There was a limit on employment at the national level because of the strategies that had been employed. Contributing, Mr. JORDAN said that there were new rules in place as a result of globalization. In the Russian Federation, millions were currently not receiving their wages as due, as was also the case in much of the transitional economies. What was being discussed was really the pace of change. He welcomed the informal sector, but remarked that that was not a solution to the problem, although it was necessary to allow the informal sector become part of the formal. He stressed that it was wrong to say the laws of the market must rule; indeed, it was people who must rule.
Mr. Jordan said that, in the present global sweep to a market economy, the United Nations should set out certain minimum employment standards. Many governments had found themselves at the mercy of financial markets, which could instantly move capital and lay off workers. The only feasible defence against such circumstances was for governments to have sound balance sheets. Otherwise, "you must do what you're told".
The representative of the Sudan said that open markets were not a neutral phenomenon. When considering export-oriented economics, one had to ask what developing countries could export. They were exporting raw commodities, and faced real barriers to the transfer of technology. The United Nations Industrial Development Organization (UNIDO), which was dedicated to technology transfer, had been abandoned by many developed countries. Could new mechanisms for official development assistance (ODA) be found to help developing countries compete?
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The representative of Austria asked whether reduced work time could be used to reduce unemployment, as many had suggested. Workers in low-wage jobs could not afford to have their working hours reduced.
The representative of Nicaragua said that her country was in the middle of economic reforms which had increased both unemployment and poverty. How could the informal sector and micro-enterprise be used to stimulate employment?
The representative of Cuba asked whether there had been a global drop in the number of trade union membership.
Ms. GRUNBERG said that the UNDP promoted the general idea of sustainable human development; it did not recommend specific economic programmes.
Mr. JORDAN said that when German workers had their hours reduced, new employment had been created, but that effect had been temporary. Unemployment in Germany was now high once again. Voluntary early retirement could also reduce unemployment, provided that adequate pensions awaited those workers. De-industrialization had led to a reduction of trade union membership throughout the developed world. In the United Kingdom, for example, over the 1980s, 3 million industrial jobs had been lost. As a consequence, British workers had some of the lowest skills and wages of any economy in Europe.
Mr. CRUZ said that, in an open market, disabled persons were at a disadvantage. Non-governmental organizations were trying to stimulate the entry of disabled persons into the labour market, but the effect thus far had been marginal.
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