Half The World’s Workers Living Below $2 A Day

Half the world’s workers, about 1.4 billion, are unable to earn enough to lift themselves and their families above the $2 a day poverty line, says a study by the International Labor Office (ILO), reports the Financial Express (India).

The ILO World Employment Report 2004-2005, released in Geneva on Tuesday, says that if policies zero in on creating jobs and improving labor productivity, this figure could be reduced. „Generating more and better jobs must become the central plank of the global drive to reduce poverty,“ director-general Juan Somavia said while releasing the report. The 185.9 million people in the world who were unemployed in 2003 represent the „tip of the iceberg“ of the decent work deficit, since more than seven times that number are employed but still live in poverty. According to the report, some 2.8 billion people were employed globally in 2003, more than ever before.

Frankfurter Rundschau (Germany) adds the ILO recommends in its report a double strategy for developing countries. On the one hand, these countries should invest in small, modern and dynamic sectors of the economy, but at the same time promote those sectors that, albeit technologically backward, employ the majority of people. This includes the so-called informal sector of flying tradesmen and people working in the crafts sector as well as in agriculture. The latter sector could experience a productivity boost if it succeeds in linking evenly distributed property rights with additional investment in rural infrastructure. Moreover, promoting small enterprises could help \226 also in industrialized countries – to reduce the productivity gap between the entrepreneur class and companies.

The Panafrican News Agency notes that according to ILO Director General Juan Somavia, „the key to reducing the number of working poor is creating decent and productive employment opportunities and promoting a fairer globalization as strategies for poverty reduction.“ „It is not only the absence of work that is the source of poverty, but the less productive nature of that work. Productivity growth, after all, is the engine of economic growth that enables working men and women to earn enough to lift themselves out of poverty,“ he said. The report called for increasing productivity and earnings in agriculture since a large proportion of workers in this sector are informally employed and living in poverty. Agriculture employs over 40 percent of developing countries‘ workers and contributes over 20 percent of their GDP.

The Press Trust of India Limited explains the report argues that the benefits of productivity gains start at the enterprise level, with lower costs of production and increased profits and competitiveness, and can continue through to benefit workers in the form of higher earnings and reduced working time. „Ultimately these benefits impact the macro-economy with lower prices, increased consumption and increased employment.“ The report acknowledges that reality can be more complex, with major shifts in employment and earnings hidden behind average figures. Productivity gains can often lead to the downsizing of some sectors, with employment increases coming elsewhere. To deal with this challenge, „institutions should provide workers with security and training to better prepare them for the changing labor market,“ it adds.

The Financial Times and The Guardian (UK) further note the world has a fair chance of halving the proportion of those living on less than $1 a day. This would require annual growth of 4.7 percent, in line with the 5 percent growth already estimated by the IMF for 1995-2005. However, the global figures are heavily weighted by rapid growth in China, India and other Asian countries, the ILO notes. Latin America, which has had poor productivity and employment growth, is likely to miss the poverty target and sub-Saharan Africa „is significantly off track“. Prospects for halving the proportion of those earning $2 a day or less are even more mixed, requiring annual growth of at least 10 per cent in most regions. Only east Asia, needing a growth rate of 6-8 per cent, has a „realistic chance“, according to the report.

Kyodo (Japan) notes that East Asia still has the world’s lowest unemployment rate, which rose from 3.1 percent in 2002 to 3.3 percent in 2003, while that in South Asia remained at 4.8 percent. Southeast Asia and Latin America have reduced joblessness between 2002 and 2003, with unemployment rates falling from 7.1 percent to 6.3 percent for the former, and from 9.0 percent to 8.0 percent for the latter. The Middle East and North Africa have the highest unemployment, which rose from 11.9 percent in 2002 to 12.2 percent in 2003. The rate in sub-Saharan Africa slightly rose from 10.8 percent to 10.9 percent. Over the past decade, only the industrialized regions experienced a decline in the unemployment rate, from 8.0 percent in 1993 to 6.8 percent in 2003. Transitional economies saw a sharp increase from 6.3 percent to 9.2 percent, and joblessness in Southeast Asia increased from 3.9 percent to 6.3 percent.

Kyodo also notes the report said offshoring and outsourcing of economic activities, which has greatly increased in the past decade, only accounts for a small fraction of job losses in industrialized countries. Only 2 percent of employees in the United States were laid off because their jobs moved to a foreign country in 2004, the report shows. But offshoring has not led to a massive transfer of jobs from industrialized to developing countries, as increased productivity growth has eliminated many jobs that previously existed, the study found.

Inter Press Service meanwhile reports that according to a report by the Brussels-based International Confederation of Free Trade Unions (ICFTU), employers in developing countries are sacrificing workers‘ rights to attract foreign investment, says a report launched Tuesday. Workers‘ rights in export processing zones (EPZs) are being violated as developing countries are forced to „employ tax breaks and a liberal labor policy“ to draw investors in search of cheaper and more docile labor, says the ICFTU which represents some 148 million workers in 152 countries. The report \223Behind the Brands – Working Conditions and Workers‘ Rights in Export Processing Zones\224 was launched at the 18th world congress of ICFTU. The congress being held in Miyazaki, Japan, is examining the effects of globalization on workers rights. It began Sunday and is due to conclude Thursday.

The New York Times finally writes that despite an overall increase in the world’s wealth, the United Nations‘ food and agriculture agency says in a report to be released Wednesday that after a slow but steady decrease, the number of chronically hungry people rose to nearly 852 million in its latest survey, an increase of 18 million since 2000. At least five million children are now dying from hunger every year. At least 80 percent of the world’s chronically hungry live in rural areas and over half of them are subsistence farmers. Competition from the world’s wealthiest farmers, heavily subsidized by their rich governments, has been blamed in part for the inequity.

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