G20 labour markets: outlook, key challenges and policy responses

Presentation by ILO Director General Guy Ryder

Labour and Employment Ministerial Meeting

10-11 September 2014

www.ilo.org

Aspiration and RealityJobs gaps in G20 compared to pre-

2007 Trend

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018415

425

435

445

455

465

475

485

495

Pre-crisis trend

Estimated/Forecasted

Upper and Lower bounds of forecast confidence interval

Advanced G20 countries

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20181,420

1,470

1,520

1,570

1,620

1,670

1,720

1,770

Pre-crisis trend

Estimated/Forecasted

Upper and Lower bounds of forecast confidence interval

Emerging and developing G20 countries

Jobs gaps in G20 compared to pre-2007 Trend

www.ilo.org

“Jobless growth”Real GDP and total employment growth since the onset of the crisis, 2008-2013

-2 0 2 4 6 8 10-4

-2

0

2

4

6

1.256940977380011.585428690876751.68942181610999

0.904014789157150.364564926626006

-0.299997774546923-0.0522951105713841

0.8164168469082611.23169853224265

2.18730118697075

-0.679264025642282-0.301340681692904

1.13239645492134

2.42284038714856

0.200172717715534

5.54467587400099

0.417348257080907

-2.98094901095322

3.53270777959748

0.388599565183787

-0.226773167492615

Real GDP

Tota

l em

ploy

men

t 45° line

*: Selected urban areas

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Long-term unemployment has grown in many countries

Percentage of unemployed without work for one year or more Q4 2007-Q1 2014

*Selected urban areas. Q3 2007-Q3 2013 for the Russian Federation; and Q1 2008-Q1 2014 for South Africa

Korea, R

epub

lic of

Mexico

Canada

Brazil*

Austra

liaTurk

ey

Russia

n Fed

eratio

n

United Stat

es

Argenti

na*

United

Kingdo

mFran

ceJa

pan

German

y

Europe

an Unio

nSpa

in Italy

South Afric

a0

10

20

30

40

50

60

70Q4 2007 Q1 2014

%

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Informal employment is high in emerging economies.

Informal non-agricultural employment(per cent), by gender

Russian Fed-eration (2010)¹

Turkey (2009) China (2010)² South Africa (2010)

Brazil (2009) Argentina (2009, Q4)

Mexico (2009, Q2)

Indonesia (2009)

India (2009/10)0

10

20

30

40

50

60

70

80

90

10.9

32.635.7 36.8

45.949.6

57.8

72.9

84.7

13.3

30.1 30.1 29.5

39.2

49.8 50.8

72.3

83.3

Women Men%

1. Corresponds only to persons employed in the informal sector.2. Six cities only.

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Weak economic recovery has led to weak wage growth, especially in

advanced economiesTrends in real average wages, 2006-2013

(year-to-year change, %)

2006 2007 2008 2009 2010 2011 2012 2013-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2.63.0

1.01.5

0.91.5

2.41.9

8.3

9.1

6.3

3.9

6.3

5.6

6.6

4.9

0.70.8

-1.1

0.6

0.9

-0.40.3 0.3

G20 G20 developing G20 developed%

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The share of GDP going to labour continues to decline in almost all G20

countriesAdvanced economies 1970 – 2013

Emerging market and developing economies 1995 - 2012

-18-16-14-12-10

-8-6-4-20

%

Saudi A

rabia

Turkey

Mexico

South A

frica

China

Brazil

India

Russian

Federa

tion

-30

-25

-20

-15

-10

-5

0

5%

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Labour productivity has grown faster than wages, especially in advanced

G20Productivity and wage index

G20 advanced economies

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201395

100

105

110

115

120Real wage index (base year = 1999) Labour productivity index (base year = 1999)

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Some good news: working poverty has continued to decline in the

emerging G20Aggregate employment by economic group in emerging G20

(millions), 1991-2013

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Extreme working poor (<$1.25) Moderate working poor ($1.25-2) Near poor ($2-4) Developing middle class ($4-13)Developed middle class & above (>$13)

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Income-led growth strategies (I): Labour incomeMinimum relative to average wage in 2012

(percentage)

01020304050607080

17.1 19.2 19.527.2 31.5 33.3 34.3 34.5 34.9 34.9 38.4 38.8 39.6 41.4 44.0

49.8

63.2

%

Change in minimum relative to average wage in 2007-12 (percentage point change)

-8-6-4-202468

-2.2

0.82.5

3.7

-3.9

3.5

0.3

4.0

-1.1 -1.1

0.5 0.6

3.54.8

-1.5

0.3

3.1

%

Note: (2007-)2010 for Argentina, China, India and Indonesia, and (2007-)2011 for Brazil, the Russian Federation and South Africa.

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Income-led strategies (II):Social protection

Emerging G20 countries

1990 1995 2000 2005 2007 2009 2010 2011 2012/130

5

10

15

20

25

0

50

100

150

200

250

Publ

ic s

ocia

l pro

tect

ion

expe

nditu

re

as a

per

cent

age

of G

DP

Inde

x va

lue

2007

= 10

0 (R

eal G

DP a

nd re

al S

P)

Other G20 countries

1990 1995 2000 2005 2007 2009 2010 2011 2012/130

5

10

15

20

25

0

50

100

150

200

250

Publ

ic s

ocia

l pro

tect

ion

expe

nditu

re

as a

per

cent

age

of G

DP

Inde

x valu

e 20

07=

100

(Rea

l GDP

and

real

SP)

Social protection expenditure (% of GDP)Real social protection expenditure (index 100 = 2007)Real GDP (index 100 = 2007)Real household final consumption expenditure (index 100 = 2007)

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But support for active labour market programmes has declined in

advanced G20ALMP expenditure and income support expenditure

Percentage change in real spending on income support and ALMPs per unemployed person, 2007-11

EU OECD-25

-20

-15

-10

-5

0

5

10Income support ALMPs%

G20 labour markets: outlook, key challenges and policy responses

Presentation by ILO Director General Guy Ryder

Labour and Employment Ministerial Meeting

10-11 September 2014