Employment Policies in a Global Context

International Labour Review, January 1, 1996 | Go to article overview

Employment Policies in a Global Context


International Labour Conference, 83rd Session, 1996. Report V: Employment policies in a global context. Geneva, 1996. i + 102 pp. 17.50 Swiss francs. ISBN 92-2-109871-0. ISSN 0074-6681.

The problem of deteriorating employment conditions in many parts of the world must be addressed in a context of greater openness to trade, sharply increased flows of direct foreign investment, slower economic growth, especially in the industrialized countries, and widespread anxiety about the ongoing process of globalization. In a dynamic perspective the benefits from participation in the global economy - higher rates of economic growth and a more efficient allocation of resources - outweigh the costs, which constitute problems to be dealt with, not justification for recourse to insulation. "The adoption of this positive view of globalization is of central importance since . . . higher growth is the key in solving, or at least ameliorating, the employment problems in many countries at all levels of development."

This substantive report directly addresses the fear that revolutionary changes in technology and work organization, compounded by the inadequacy of available policy instruments, have rendered full employment an unrealistic goal in most of the world. "Scepticism over the usefulness of the concept of full employment, strengthened by the patent failure to achieve it in recent times, deserves careful examination at the outset of any discussion of the employment problem." The debate over different explanations of the employment situation is anything but trivial: the implied policies and priorities differ fundamentally. Therefore the questions of jobless growth, changes in the nature of work, and causes of unemployment are examined empirically.

Evidence presented in this report demonstrates that there is no trend reduction in the volume of work: employment growth in 1960-95 has been steady; jobs are not inexorably disappearing. In fact, economic growth has even become more job-intensive: the problem, except in parts of Asia, is that economic growth has slowed recently. "The aggregate data do not provide any support for the imminent `end of work' or even the beginnings of jobless growth. This weakens the need to take very seriously the various proposals for societal re-engineering that is often prescribed in the literature." Nor does the evidence support the alarmist views of a bleak future for regular, protected employment. "There has been no universal trend towards a decrease in job tenure among OECD countries . . . On the contrary, a large core of the workforce is still in stable and secure jobs."

"There are no compelling reasons to abandon full employment as a policy objective." The report examines the relevance of full employment as an attainable goal for the industrialized countries, transition economies and developing countries in turn.

Structural and aggregate explanations for high unemployment in the industrialized countries are examined empirically, and the role of international trade in increasing inequality is considered. Technological change and trade provide only partial explanations of the decrease in the relative demand for unskilled workers. The persistence of high unemployment in Europe, widening wage dispersion and the emergence of a secondary labour market can all be attributed to "a persistently inadequate economic environment since the 1970s . . . [M]ore employment-minded macroeconomic policies and stronger economic growth would reduce structural unemployment; ... displacement effects ... would disappear; . . . it is also probable that higher growth would raise productivity gains and thus ease the conflict between either workers and employers or between different categories of workers over the shares of output and real earnings.

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