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During
the last half century, humanity has achieved historically unprecedented
advances in nutrition, health, education, life expectation and
reduction in material poverty. National experiences differ, but
people in the developing world have recorded historically unprecedented
economic and social progress between 1950 and 1990.
Unfulfilled promises
Despite this dramatic progress, global
poverty and unemployment continue to be the major challenges of
our times. On the eve of the new millennium, poverty remains the
lot of one-fourth of humanity. One-third of the world’s labour
force is either unemployed or underemployed. These stubbornly
persistent high levels of poverty and unemployment have triggered
growing concern over social exclusion. Indeed, problems of human
insecurity and unemployment have returned to the top of the political
agenda in most countries. The central role of remunerative employment
in poverty reduction is now fully recognised as Commitment Three
of the Copenhagen Social Summit illustrates: “we commit ourselves
to promoting the goal of full employment as a basic priority of
our economic and social policies, and to enabling all men and
women to attain secure and sustainable livelihoods through freely
chosen productive employment and work”.
A lot remains to be done to make those commitments a reality.
Employment is the first step out of poverty. It is at the core
of economic development and social stability. There is convincing
empirical evidence across countries and in different regions of
the world that employment does have a direct and positive impact
on poverty. In industrialised countries, lowering the rate of
unemployment is usually poverty reducing. The exception would
be in cases where the decline in unemployment comes as a result
of an expansion in low-paid work that does not provide incomes
high enough to lift the workers concerned out of poverty. Thus
a new category of working poor has emerged.
The same is true of many developing
countries. However, the specific characteristics of labour markets
should be taken into account. For the majority there are special
reasons why the rate of open unemployment is a poor indicator
of what the level and incidence of poverty are. This is because
regular wage employment is not the dominant mode of work. Instead,
the majority of the employed are in some form of self-employment,
particularly in the informal sector. Indeed, during the past two
decades, informal sector employment increased throughout the developing
world. Sixty per cent of total employment in Latin America is
informal; 90 per cent of new jobs created over the last decade
in Africa and Latin America are informal ones; the sector has
become the refuge of several millions in Asia after the crisis.
Moreover, a distinctive characteristic
of labour markets is the prevalence of atypical forms of employment,
particularly for women. Women have provided the bulk of new labour
supply in both developed and developing countries over the past
two decades. Women’s labour force growth since 1980 has been
substantially higher than that of men for every region of the
world except Africa. While this trend may suggest a closing of
the gender gap in employment, the new and enlarged role of women
in the labour market has not always been an entirely positive
development for them. Indeed, they tend to be concentrated in
the lower status and lower-paid jobs. They are also more likely
to be the first out of work during crisis. This entails a greater
incidence of poverty for women than for men. Feminization of poverty
is a worldwide phenomenon.
Policies for employment-intensive growth
 A
sound policy of employment creation for poverty alleviation must
build upon the proper understanding of the sustainable growth
– employment – poverty nexus, and should therefore have
the following building blocks.
Firstly, the objective of macroeconomic policies should
be to accelerate sustainable growth, and that growth should be
employment-augmenting. An appropriate macroeconomic policy framework
for reducing poverty and promoting equality should, inter alia,
meet the following three conditions: (a) achieve fast and sustainable
growth; (b) ensure that growth is employment-intensive and gender-sensitive;
(c) create conditions to reduce vulnerability to short-term shocks.
Secondly, while macroeconomic policies can ensure dynamic,
stable, employment-intensive growth, there will still be groups
of people excluded from the market. Thus, improving market outcomes
for the poor and vulnerable implies improved access to factor
markets for women and men, as well as increased returns to labour,
the major asset of the poor. Targeted programmes should be adopted
to enable groups such as the young, the disabled, migrants and
indigenous populations to find decent employment. Empowerment
to take advantage of increased opportunities provided by the right
economic policies is essential for everybody.
Thirdly, public policies
have a crucial role to play. They can contribute to better employability
and poverty reduction particularly through: (a) the reallocation
of public expenditure towards human needs in education, health
and skill formation. Investment in people is not a cost to society
but one of its most remunerative investments; (b) the adoption
of gender-sensitive public policies for employment promotion
and reaching gender equality; and (c) the extension of social
protection through social safety nets. The best form of social
safety net is provided by full employment. However, in the absence
of full employment, and in situations of slow growth, the need
for social protection can hardly be over-emphasised. A social
protection system, in its broad elements, needs to be progressively
introduced in the face of increasing job and income insecurity.
Such systems should be cost-effective and financially viable,
as well as administratively manageable. They should also be targeted
at the poor and vulnerable. Reducing human insecurity must be
a concerted objective of all public policies.
Finally, quality of employment
also matters. The Nobel Prize laureate, Amartya Sen, recently
stated at the International Labour Conference that “Given
the massive levels of unemployment that exist in many countries
in the world today […] it is right that policy attention
be focussed on expanding jobs and working opportunities. And yet
the conditions of work are important too. It is a question of
placing the diverse concerns within a comprehensive assessment,
so that curing of unemployment is not treated as a reason for
doing away with reasonable conditions of work of those already
employed, nor is the protection of the already-employed workers
used as an excuse to keep the jobless in a state of social exclusion
from the labour market and employment.”
 This
underscores the central role that decent employment has to play
in the eradication of poverty and the empowerment and advancement
of the poor. Promotion of Decent Work for All – the
new primary objective of the ILO’s work – involves,
in the first place, universal acceptance of a set of fundamental
values: that nobody should be extra-economically coerced into
work, that no child should work, beginning by eradicating the
worst forms of child labour, that there should be no discrimination
on the basis of gender or social class in the world of work, and
that all workers should have the right to organize themselves
and negotiate collectively. These are the values which are enshrined
in the recent ILO Declaration on fundamental Principles and Rights
at Work.
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A
sound policy of employment creation for poverty alleviation
must build upon the proper understanding of the sustainable
growth – employment – poverty nexus and should
therefore have these building blocks.
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Employment creation for poverty eradication:
the need for a global compact
In conclusion, for the declared target
of halving poverty by the year 2015 to be achieved, an effective
agenda for action would require a concerted effort at three mutually
reinforcing levels.
First,
there is a need for renewed and specific political commitments
to specific targets for poverty reduction at the national level
and the adoption of policies to achieve such objectives.
Second, development cooperation
must be enhanced to ensure that poorer and marginalised countries
on the fringe of the global economy are provided with international
assistance and an enabling environment to facilitate and improve
the conditions of their integration into the world economy. In
this context, a positive step has been the major rethinking of
the approach to debt forgiveness, both by international organizations
and bilateral donors.
I strongly suggest that an effective way of responding to the
call for linking debt relief to poverty reduction is to make sure
that enterprise and employment creation is the mechanism through
which a sustainable solution to poverty is achieved. ILO is committed
to this task.
Finally, the multilateral
system can help strengthen national capacities to create employment
for poverty eradication. The organizations of the United Nations
system should develop poverty eradication initiatives that combine
the capacities and resources of agencies concerned with civil
society and the private sector.
Let’s play as a team to
achieve decent work for all and eradicate poverty! The time
has come to find a way to feed and house, clothe and educate,
employ and nurture the excluded and disadvantaged of this earth.
The means are there. It is only the will to act together that
is still faltering, to act together as a community, as a region,
as a nation, as a world. We all know that the vision of a better
future and the hope of a better existence lies within full employment.
We thus need to promote the values and the policies that can cut
the Gordian knot of unemployment. Decent work for all is the condition
to achieve human security. It is possible.
Juan Somavía is Director General of the International
Labour Organization. As Chile’s UN Ambassador in New York
(1990-99), he was twice President of the United Nations Economic
and Social Council (1993 and 1998). As Chairman of the Preparatory
Committee, he led the negotiations that culminated in the World
Summit for Social Development, held in Copenhagen in 1995. He
served twice as President of the United Nations Security Council,
in April 1996 and October 1997. He actively participated in the
restoration of democracy in Chile through holding the presidency
of the International Commission of the Democratic Coalition in
Chile and as founder and Secretary General of the South American
Peace Commission 1986-1990. For more information, contact: ILO,
4, route des Morillons, CH-1211 Geneva 22, Switzerland; Fax: 41-22-799-0577
Website: www.ilo.org
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