Billion unemployed add to global feel-bad factor

The much-talked about British "feel-bad factor" is a global phenomenon, with workers throughout the world experiencing deteriorating employment conditions, according to a report released today by the International Labour Office, an arm of the United Nations.

Nearly one billion people, approximately 30 per cent of the global workforce, are out of work or under-employed, the study says. The reduction in job opportunities is attributed to lower growth rates in industrialised countries since 1973 and the failure of most developing nations to recover fully from the economic crisis of the early Eighties.

The long-term unemployed have been "evicted" from the world of work and there is increasing "casualisation" of millions of jobs.

The report condemns those who believe in the inevitability of "jobless growth" - where the economy grows but employment stagnates.

It also takes issue with the idea that present rates of unemployment constitute a "natural and inevitable outcome of market forces".

Michel Hansenne, ILO director-general, contends that despite increasing worldwide competition, the present jobless figures are neither politically nor socially sustainable.

The study attributes predictions about the "end of work" to "unwarranted extrapolations from dramatic episodes of corporate downsizing, ignoring compensatory job creation elsewhere in the economy".

Mr Hansenne said: "Abandoning the goal of full employment means lowering social expectations at a time when the world economy is becoming more integrated through trade and investment flows. These forces have the potential for spurring higher rates of economic growth and job creation and thus higher levels of well-being and social justice."

Politicians are told that the aim of full employment, suitably updated, should remain as a principal objective of economic and social policy.

In a passage which will find more favour among the dirigiste governments of Continental Europe than Conservative Britain, the paper calls for institutional mechanisms for moderating wage inflation. Pay- bargaining periods should be synchronised, economic predictions made of the basis of a "consensus" and there should be "social pacts" between employers, workers and governments. Ministers should also encourage profit-sharing and tax-based incomes policies.

The ILO argues against labour-market deregulation as a means of reducing unemployment. While recognising some regulations need reforming, there should be no "blanket presumption" that such rules are invariably sources of rigidity and that deregulation is automatically the optimal solution.