Decent Work for All ASIAN DECENT WORK DECADE 2006-2015

Kee Beom Kim Employment Specialist

ILO Bangkok November 20, 2013

Employment targets and projections, Jakarta, November 20-21, 2013

Employment targets

Outline

I. Setting the context

II. Employment targets for quantity and quality of jobs

III. Concluding thoughts

Setting the context: Policymakers around the world face increasingly complex economic and employment challenges

While economic growth has been robust in Asia and the Pacific in recent decades, more exposed to external shocks and periodic crises

Real gross domestic product, 1991-2012 (%)

-10.0

-5.0

0.0

5.0

10.0

15.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p2012p

East Asia South-East Asia & the Pacific South Asia

Source: IMF: World Economic Outlook Database, July 2012 update.

Source: World Bank (2012), PovcalNet data, supplemented by household survey data from India and publications of official statistical offices (Republic of Korea and Taipei, China))..

And (robust) growth has often not been inclusive…

Gini coefficient, earliest year in 1990s and latest year

28.9

30.0

32.1

32.8

34.2

35.6

36.5

36.7

37.0

38.9

40.0

40.3

43.0

43.4

44.4

46.2

20 25 30 35 40 45

Korea, Rep. of (1992-2010)

Pakistan (1991-2008)

Bangladesh (1992-2010)

Nepal (1996-2010)

Taipei, China (1990-2010)

Viet Nam (1993-2008)

Mongolia (1995-2008)

Lao PDR (1992-2008)

India (1993-2010)

Indonesia (1990-2011)

Thailand (1990-2009)

Sri Lanka (1991-2007)

Philippines (1991-2009)

China (1990-2008)

Cambodia (1994-2007)

Malaysia (1992-2009)

Earliest year

Latest year

Employment by economic class (millions)

Source: Kapsos and Boumpoula (2013).

And while remarkable progress has been made in reducing extreme working poverty, many are above but near the poverty line

Many countries are also faced with “jobless growth” 3,

7

3,8

3,7

3,2

3,6

3,3

3,2

3,3

3,5

3,2

3,0

3,1

3,1

3,0

3,3

3,4

3,5

3,6

3,1

3,5

3,2

3,2

3,3

3,6

3,4

3,2

3,3

3,3

3,2

3,5

3,7

3,9

4,0

3,8

4,3

4,2

3,7

3,7

3,9

3,7

3,3

3,3

3,3

3,1

3,3

172

149

125

75 8169

59 59 5647

30 25 20 16 16

184165

135

92 9273

63 61 61 5438

30 27 2221

327

290

227

157 150 145

121 114 121106

8466 59

46 40

-100

-50

0

50

100

150

200

250

300

350

0

1

2

3

4

5

6

7

8

9

10

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Indonesia: total effects on gross output and employment

Constr. Output multiplier Avg - Output multiplier Agric - Output multiplier

Constr. Employment multiplier Avg - Employment multiplier Agric - employment multipliers

Source: ILO (forthcoming).

Countries face the challenge of creating more jobs, and in Asia, where unemployment rates in remain relatively low…

Source: ILO, Trends Econometric Models, October 2012.

…the challenge of improving the quality of jobs, including those in “vulnerable employment”…

Share of own-account and contributing family workers (“vulnerable employment”) in total employment (%)

Source: ILO, Trends Econometric Models, October 2012.

…or in informal employment…

0 20 40 60 80 100

China

Thailand

Sri Lanka

Viet Nam

Philippines

Indonesia

Pakistan

India

Nepal

Total Female Male

Informal employment as a share of non-agricultural employment, most recent year (%)

Note: Indonesia includes only Banten and Yogyakarta; Sri Lanka excludes the Northern Province; China covers six urban areas. Source: ILO: Statistical update on employment in the informal economy (Geneva, June 2012); National statistical offices.

…which is often characterized by inadequate earnings, poor working conditions, with little or no social protection or protection by law

Total and youth unemployment rates (%)

0.0 5.0 10.0 15.0 20.0

Thailand (Q2 2012)

Macau, China (Q2 2012)

Viet Nam (2011)

Singapore (Jun 2012)

Korea, Rep. of (Sep 2012)

Japan (Aug 2012)

India (2010)

Pakistan (2011)

Marshall Islands (2011)

Australia (Sep 2012)

Taiwan, China (Aug 2012)

Hong Kong, China (Jul 2012)

New Zealand (Jun 2012)

Philippines (Jul 2012)

Sri Lanka (Q3 2011)

Indonesia (Feb 2012)

Youth Total

Note: Youth aged 15-24, except Hong Kong, China (aged 15-19); Macau, China (aged 16-24); Pakistan (aged 15-19); Singapore (Residents aged 15-29) and Viet Nam (aged 20-24). Source: National statistical offices; ILO: Key Indicators of the Labour Market, 7th Edition (Geneva, 2011).

Labour market situation particularly bleak for world’s youth

But many young people are queuing for “good quality jobs”, for which there are not enough of

4.5

2.1 2.2

1.2

2.8

1.0

15.8

1.8

16.9

1.4

18.4

1.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

15-24 25+ 15-24 25+ 15-24 25+

2010 2011 2012

(%)

Youth and adult unemployment rates in Viet Nam, by education

Never attended

Incomplete primary

Completed primary

Completed lower secondary

Completed upper secondary

Vocational training

College (technical)

University and above

-

5.0

10.0

15.0

20.0

25.0

Youth unemployment rate, by education, Indonesia 2013

Source: ILO, based on national labour force surveys

While much progress has been made, gender gaps remain wide

Labour force non-participation rate by sex, 2011 (%)

Note: Data for Viet Nam and Cambodia are for 2009. Source: National statistical offices; ILO: Laborsta, Economically Active Population Estimates and Projections .

Need also to boost labour productivity, including by addressing sectoral differences in productivity

Output per worker by sector, constant 2000 US$

Source: ILO calculations based on World Bank, World Development Indicators, 2011 and national statistical offices.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Cambodia(2009)

Viet Nam(2009)

Indonesia(2010)

Philippines(2010)

Thailand(2010)

Malaysia(2009)

Agriculture

Services

Industry

Decent Work Agenda

G20: “Creating more productive and better quality jobs is at the heart of our countries’ policies aimed at achieving strong sustainable and balanced growth, poverty reduction and increasing social cohesion” (G20 Leaders ‘ Declaration, September 2013, para 25)

Post 2015 Development Agenda: “The key elements of the emerging vision

for the development agenda beyond 2015 include: …”(c) inclusive economic transformations ensuring decent jobs, backed by sustainable technologies, to shift to sustainable patterns of consumption and production;…” (Report of the Secretary-General: A life of dignity for all: accelerating progress towards the Millennium Development Goals and advancing the United Nations development agenda beyond 2015, July 2013”)

Amidst complex challenges, employment increasingly prominent in international and national policy agendas

And countries are increasingly adopting various types of employment targets, including both quantitative and qualitative…

Create five million jobs by 2020 in order to bring the

unemployment rate down from 25% to 15% (South Africa, New

Growth Path)

30,000 additional jobs in the tourism sector (Cambodia, National

Strategic Development Plan Update 2009-2013)

75% of the working-age population (20-64 years) in work (EU,

Europe 2020)

Create one million jobs with fair wages (Chile, Government

programme: For Change, future and hope Chile 2010-2015)

Annual non-agricultural private sector job growth rate over 2%

(Burkina Faso, National Employment Policy 2008)

… …as employment targeting can support policy coordination, coherence and

accountability among the many actors involved in employment creation

Indonesia National Medium-Term Development Plan (RPJMN) 2010-2014

Reduce unemployment rate to 5-6% at the end of 2014

Creating more jobs and reducing unemployment critical issue

But in countries with a large number of people clustered around the

poverty line and lacking effective unemployment insurance systems,

many people often have no choice but to work in order to support

themselves and their families

Thus the major challenge is underemployment and working

poverty

Low unemployment rates alone do not appear to correlate with development performance in Indonesia

…while other measures (i.e formal employment) better indicating development performance (in terms of peal capita RGDP)

Source: Tadjoeddin, M. Z (forthcoming).

Vulnerable employment also closely correlated with labour productivity in ASEAN+3

Source: ILO, Labour and Social Trends in ASEAN 2008.

The current MDG framework recognizes the critical issue of quality jobs for poverty reduction and development…

MDG1 Eradicate extreme poverty and hunger, Target B (‘full and productive employment and decent work’)

1.4 Growth rate of GDP per person employed

1.5 Employment-to-population ratio

1.6 Proportion of employed people living below $1 (PPP) per day

1.7 Proportion of own-account and contributing family workers in total employment (“vulnerable employment”

MDG3 Promote gender equality and empower

women

3.2 Share of women in wage employment in the non-

agricultural sector

…as does the emerging vision on the post 2015 development agenda

Report of the High-Level Panel of Eminent Persons on the Post-2015 Development

Agenda (“A New Global Partnership: Eradicate Poverty and Transform Economies through

Sustainable Development (Chaired by Dr Susilo Bambang Yudhoyono, Ellen Johnson Sirleaf

and David Cameron)

Transform economies for jobs and inclusive growth: “This is a challenge for every

country on earth: to ensure good job possibilities while moving to the sustainable patterns of

work and life that will be necessary in a world of limited natural resources.”

Illustrative goals and targets:

Concluding thoughts

In addition to underemployment and working poverty, heterogeneity of employment types have increased in recent decades, underscoring the importance of targeting beyond employment quantity

BPS already collects data on time-related involuntary underemployment, vulnerable employment, informal/formal employment, should further consideration be given to qualitative employment targets in addition to quantitative targets

Employment projections models serve as important analytical tools to monitor progress towards employment targets

Need for models to also address both the quantity and quality of

employment

ASIAN DECENT WORK DECADE 2006-2015

Decent Work for All

For more information, please contact:

Kee Beom Kim (kim@ilo.org)

ILO Decent Work Technical Support Team

For East and South-East Asua and the Pacific

www.ilo.org/asia