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The International Labour Organisation (ILO) released its World Employment and Social Outlook this week, projecting that global unemployment will rise “modestly” in 2017 and hold steady in 2018 at 5.8%.
This global estimate of unemployment amounts to 203.8 million people by 2018 compared with an estimated 197.7 million at present.
The report, however, mostly shows how inadequate unemployment is as an indicator of economic wellbeing.
The vast differences between regions and between rich and poor countries is not captured by “unemployment” at all.
Instead, the most important thing about the world’s labour market is that the nature of work matters much more than the aggregate rate of employment or unemployment.
Developed countries have a higher collective unemployment rate than the rest of the world.
They sit at 6.2% compared with 5.7% for so-called emerging countries – the broad category most of the world falls into.
The so-called developing countries, mostly the poorest African countries that have recent devastating wars as a common denominator, have the lowest unemployment at 5.5%, estimates the ILO.
Looking at things from a God’s eye vantage point, employment levels have no relationship whatsoever to welfare.
Instead, the dividing line between the rich and poor world is manifested in the fate of the employed, not the unemployed.
The ILO estimate is that 3.32 billion humans will be employed in 2018. Unfortunately, 41.7% of them will be in what the ILO calls “vulnerable employment” – mostly in Asia, Africa and South America.
Vulnerable employment is defined as all own-account workers and “contributing family workers”. Think of South Africa’s urban garbage pickers and hawkers. Think small-scale rural farming.
These are very likely bad jobs and also very often be unpaid, especially for women.
In sub-Saharan African the unemployment rate is only 7.2% and this is also distorted upwards by South Africa’s famously high unemployment rate.
Of all the people who are being counted as employed on the subcontinent, 67.8% are however expected to be “vulnerable” in 2018.
By way of comparison North America’s vulnerable employment is estimated at 6.6%.
South Africa is also an outlier because it has almost no “vulnerable” employment.
This reflects the absence of an informal economy and small agriculture on anything near the scale of most other countries on the continent.
In Southern Asia – India and its neighbours – the rate of vulnerable employment is estimated to be 73.4% in 2018.
As with sub-Saharan Africa, this rate is slowly falling, according to the ILO’s estimates.
The absolute numbers are however increasing as population growth puts more and more people in the labour force.
The major global employment trend the ILO report arrives at is ultimately that there is a glacial decline in the rate of vulnerable employment almost everywhere.
The global estimate is that 42.9% of jobs are of this nature now, falling to 42.7% in 2018.
The only place this rate is going up is in the Arab states.
Another key indicator casts light on the employment estimates: working poverty.
According to the ILO’s estimates, 61.9% of all employed people in sub-Saharan Africa are among the working poor. This is defined as earning below $3.10 a day on a purchasing power parity basis. This overlaps with vulnerable employment and also marks the line between the world’s rich and poor parts. The working poverty rate is not even reported for developed economies.
In the rest of the world the report estimates that working poverty will characterise 28.1% of employed people in 2018, down from 29.4% now.
Southern Asia will have 47.1% of its workers living in poverty, says the report.
Even though Africa has a lower rate of vulnerable employment, it has a higher rate of working poverty.
In other words, Africa is the global centre of people working for little or no money.
On the report, ILO director general Guy Ryder says: “We are facing the twin challenge of repairing the damage caused by the global economic and social crisis and creating quality jobs for the tens of millions of new labour market entrants every year.
“Economic growth continues to disappoint and underperform – both in terms of levels and the degree of inclusion. This paints a worrisome picture for the global economy and its ability to generate enough jobs. Let alone quality jobs.”
Discouraged workers - the numbers game
The ILO uses what South Africans call the official definition of unemployment as opposed to the expanded one, which includes discouraged workers.
In South Africa this is the difference between an unemployment rate of 27.1% and 36.3%.
In advanced economies like the US, where these data are also readily available, it pushes the unemployment rate up from about 2% to as high as 9%.
The ILO report does not estimate this, so the estimated global unemployment rate of 5.8% has to be considered a low figure, at least by local standards of what comprises unemployment.
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