The International Labour Organization’s main annual report, covering more than 180 countries and 84 percent of the global workforce, said a full three-quarters of workers have temporary or short-term contracts, held informal jobs or were in unpaid family work.
Among workers who earn salaries, only 42 percent have permanent contracts, said the ILO’s 2015 World Employment Social Outlook Report titled The Changing Nature of Jobs.
In such conditions, working is no guarantee of prosperity.
“These new figures point to an increasingly diversified world of work,” Ryder said, calling the shift from standard jobs a “departure from long-term historical patterns.”
“In some cases, non-standard forms of work can help people get a foothold into the job market,” he said, warning though that the “emerging trends are also a reflection of the widespread insecurity that’s affecting many workers worldwide today.”
There were wide regional variations in terms of solid contract-bound employment with the figure standing at around 80 percent in developed economies and central and southeastern Europe but falling to about 20 percent in South Asia and sub-Saharan Africa.
The rest were self-employed or engaged in family jobs.
“The shift we’re seeing from the traditional employment relationship to more non-standard forms of employment is in many cases associated with the rise in inequality and poverty rates in many countries,” said Ryder.
“What’s more, these trends risk perpetuating the vicious circle of weak global demand and slow job creation that has characterised the global economy and many labour markets throughout the post-crisis period.”
Published by The Sunday Times, 12 April 2015 by Peter Law @PeterJohnLaw
Perth recorded the biggest unemployment rise of any major Australian capital city last year, with limited public transport in battler suburbs partly blamed.
The number out of work in the northeast suburb of Girrawheen soared almost 50 per cent in 2014 – one of the biggest increases anywhere in Australia.
The suburb’s population has boomed over the past five years, but suffers from poor public transport connections to work centres, according to local leaders.
In the 12 months to December 2014, the number of Girrawheen residents unemployed increased from 12.2 per cent to 17.9 per cent.
Neighbouring Balga and Mirrabooka had Perth’s worst jobless rate, rising from 14.4 per cent to 18.9 per cent, according to the Employment Department’s Small Area Labour Markets report.
Big rises were also recorded in Armadale-Brookdale (16.7 per cent unemployment rate) Gosnells (12.1 per cent), Marangaroo (8.8 per cent) and Yanchep (7.8 per cent).
Image Source The Sunday Times
Unemployment across Perth increased 23.5 per cent over the year, compared with Brisbane (13.5 per cent), Melbourne (12.7 per cent) and Adelaide (4.9 per cent), while Sydney recorded a 1.7 per cent drop.
The figures came after WA iron ore miner Atlas Iron announced it would suspend all mining operations because of plunging iron ore prices, with more than 500 people expected to lose their jobs.
Yesterday, Australia’s richest woman, WA mining magnate Gina Rinehart, warned Australia could experience a shocking deterioration in living standards as debt levels approached unchartered territory and commodity prices crashed.
Out of Perth’s labour force of 1.12 million people, the number of unemployed rose from 47,500 people to 58,700.
Commerce Minister Michael Mischin said Perth’s unemployment rate of 5.2 per cent was still the nation’s equal lowest and well below the national average of 6.2 per cent.
Professor Alan Duncan, director of the Bankwest Curtin Economics Centre, said joblessness was rising faster in parts of Perth already with high unemployment.
The unemployment rate is one of the most closely followed macroeconomic indicators. Of importance in its own right, it tells us about the level of spare capacity in the economy and provides information about likely future developments in inflation.
Recent fluctuations in the unemployment rate have surprised many economists. In July, the unemployment rate jumped by 0.3 percentage points to 6.4% – its highest level in twelve years – only to be unwound in the August release.
The sharp increase in July may partially reflect measurement issues – the Australian Bureau of Statistics (ABS) updated the criteria to be actively searching for a position, although the ABS said the impact of this change was not significant.
The unwinding of this spike in unemployment in August was due to a surge of part-time employment – in fact the largest growth rate since the mid-1980s. The increase was so large that the ABS extensively checked the figures. However, the lift in part-time employment was evident in many dimensions of the data – it occurred both across the country (with the exception of the Australian Capital Territory) and across many age groups.
Amidst this considerable volatility, it is probably best to focus on estimates of the “trend” unemployment rate, which is also advocated by the ABS. The trend measure effectively smooths the data, down-weighting the recent observations.
However, trend estimates aren’t perfect – for example, as more data become available they can be revised. Also, by down-weighting the recent data they can miss turning points which policymakers might have otherwise wanted to react to in a timely manner. Bearing these caveats in mind, the trend unemployment rate in recent months has moved higher.
At around 6%, the trend unemployment rate suggests that slack exists in the labour market. Similarly, the trend participation rate – the ratio of people in the labour force (either employed or unemployed) to the population – recently has picked up, but remains below the levels of the late-2000s.
While as discussed in a speech by Reserve Bank of Australia Assistant Governor Christopher Kent part of the decline in the participation rate probably can be explained by structural factors, such as the ageing of the population, a component is likely to be cyclical.
Recent Reserve Bank of Australia model-based estimates also suggest that spare capacity currently exists in the labour market, but much less than occurred during the early-1990s recession. The Reserve Bank study also highlights the considerable uncertainty which surrounds these estimates.
The unemployment rate is a narrow measure of labour market slack – it abstracts both from people working fewer hours than they would like, or in a position that does not fully utilise their skills. The ABS tackles the first aspect in its measure of labour force underutilisation. As it is a broader measure, the labour underutilisation rate is always greater than the unemployment rate, although the wedge between them widened in the early 1990s recession.
We’re getting more ‘flexible’
This wedge widened with the onset of the global financial crisis, unwinding some narrowing in it which had occurred. An important part of the macroeconomic adjustment that occurred in Australia during the GFC was a reduction in average hours worked. This mitigated the rise in the unemployment rate and probably was facilitated by the more flexible nature of the labour market today relative to in the past.
The increase in the labour underutilisation rate over the past eighteen months has outpaced that in the unemployment rate. In the September quarter it exceeded the levels reached during the GFC, although it remains well below the high levels reached during the severe early-1990s recession.
The rise in labour underutilisation has not been uniform across all parts of the labour market. While typically labour underutilisation is much higher for those aged 15-24 compared to those 25 and above, and it increases sharply during either recessions or slowdowns, recently it has risen noticeably.
The unemployment rate and the labour underutilisation measures show slack exists in the labour market, but much less than in the early 1990s. This slack is likely to hold down wages growth.
Private sector wages growth over the year to the June quarter was the lowest rate since the measure preferred by policymakers was introduced in the late 1990s. As wages, together with productivity, are the key factors which influence domestically-based inflationary pressures, these are likely to remain contained in the near term.
Tim Robinson is on extended leave without pay from the Reserve Bank of Australia. The views expressed in this article are his own.