ILO warns of four year "lag" between economic recovery and jobs

Jun 12, 2009, 8:49 GMT

Geneva - Governments need to implement policies so the job market does not lag behind the economy when a recovery begins, the head of the International Labour Organization said Friday.

Juan Somavia, the director-general of the ILO, warned that without government intervention and policy planning there could be a gap of four or five years between when the economy starts to recover and the job markets returns to pre-crisis levels of employment.

'The idea is then to reduce the lag time, to put in place policies to reduce the lag time,' Somavia told reports in Geneva.

He was speaking ahead of the organization's annual conference which will begin on Monday.

France's President Nicolas Sarkozy, his Brazilian counterpart Luiz Inacia Lula da Silva and President Cristina Fernandes de Kirchner of Argentina are all expected to attend.

Presidents and prime ministers of Finland, Poland, Togo, Mozambique and Jamaica were also scheduled to make addresses.

The summit will focus on the 'global jobs crisis.'

Somavia said the summit would highlight the need for 'political leadership that puts the issue of employment and social protection on the agenda.'

He noted that as the world's population grows, more jobs need to be created on a regular basis to accommodate the new workers. A lag in job recovery would mean growing global levels of unemployment.

The latest data of the ILO shows that by next year, unemployment could hit global rates between 6.5 per cent and 7.4 per cent. This would roughly be equal to 210 million and 239 million unemployed worldwide.

Somavia also noted that wage participation in the gross national product was coming down during the boom years, which in part made the financial crunch bite harder. He said there was a need to protect people's salaries and increase the portion of wages in the national product.

'Protecting wages to the highest level and to try and take measures that protect and increase your income... is absolutely essential. It's a fundamental element of recovery,' Somavia said.

The summit would last through Wednesday next week, while the annual conference itself, which brings together unions, employers and governments, would continue until the following week.