December 21, 2012 | Contribution by
DAVID A. ROBALINO By David A. Robalino, Lead Economist - Labor and Youth Team Leader, the World Bank I am back to Same for the holidays. People here are busy getting ready to receive the tourists. Most will come after Christmas though, so things are still quiet. It's a good time to look back at the year and see what has happened on the jobs front.
Worker in factory. India. Photo: Ray Witlin / World Bank
The numbers show that, overall, 2012 was better than 2011 — more people are working now than a year ago. But depending on where you look, you still find many people who are struggling to find jobs or recover the earnings they lost during the financial crisis. And in countries like Greece, Spain, Tunisia, and Egypt things have been getting worse. Jobs in industrial countries In the United States, the job picture is slowly improving. Last month's U.S. jobs report showed that around 2.6 million more people were working compared to 2011 and that average monthly earnings had gone up. The unemployment rate continued to drop during 2012 and is now close to 7.7 percent. But there are also fewer people — around 2.3 million — participating in the labor force. And for some groups, like workers with less than a high school diploma, the unemployment rate is basically unchanged at 12.2 percent. What happens next will depend, in part, on how Republicans and Democrats deal with the "fiscal cliff." The fact that the Fed is now targeting the unemployment rate and ready to accept more inflation might also help. In the European Union and Euro area, the OECD reports that employment didn't change by much over the year (from 98.6 to 98.8 million, and from 64 to 63.8 million, respectively). But unemployment went up — to 10.5 percent, and 11.5 percent, respectively — with much of the increase owing to Greece, France, Italy, Poland, and Spain. In Greece the share of people unable to find jobs increased from 20 to 24 percent during the year and in Spain from 22 to 25 percent. The ILO reports that job prospects also aren't good for youth (ages 15-24), particularly in France, the United Kingdom, Italy, and Spain (where over half of youth are unemployed). Here we are watching closely how European leaders manage the debt crisis. Jobs in the rest of the world In the developing world and economies-in-transition, the news is a bit more positive. At least for the countries where we have up-to-date statistics, our Job Trends notes (October) show that both employment and wages continued to grow during 2012. China was the big winner, with employment rising by close to 10 percent (see Figure). But even among the countries in Eastern Europe that were hit hard by the crisis, unemployment rates fell sharply. That said, there is growing concern that employment growth has been slowing in countries like Chile, Indonesia, and Turkey — partly because of Europe's debt crisis. Moreover, the overall employment numbers don't tell us much about the types of jobs the economies are creating. What we know is that many are informal jobs or jobs in subsistence activities, not the better quality jobs we would hope for. China leads with employment rising rapidly (Employment Growth in Selected Developing Countries, 2011 and 2012, in percent
Source: October 2012 Job Trends, World Bank.
Unfortunately, for many countries, particularly low-income ones, we don't know exactly what has happened over the past 12 months — either because they lack updated surveys or simply don't publish them. But recent reports show that things are challenging in parts of the Middle East, Sub-Saharan Africa, and South Asia. Last week I was in Tunisia and Egypt. After the revolutions, things have gotten worse. Both governments are quite concerned with finding jobs for youth, particularly in the less-developed areas, and political instability is not helping. It is estimated that over 30 percent of youth are unemployed and many more are idle. The two countries are implementing programs to connect youth to jobs or help them start a business. But this takes time and might not help much if the jobs or business opportunities aren't there in the first place. For now the most effective solution — particularly in Egypt — has been to create jobs directly through public works and services. The Jobs Knowledge Platform So there is much to do to improve jobs and earnings opportunities for workers around the world. But I hope this year marks a turning point. First, because of the publication of the 2013 World Development Report on Jobs, which shows how central jobs are not only to improve standards of living and reduce poverty but also to increase productivity and promote social cohesion. Second, because of the launch of the Jobs Knowledge Platform (JKP) back in April. Since then, the JKP has been expanding its network, which now reaches more than 5,000 people around the world. It has been facilitating the exchange of ideas about the policies and programs that countries can consider to tackle employment through blogs, interviews, virtual events, conferences, and Experiences From the Field. I hope that during 2013 our network will continue to grow and contribute to the policy debate by bringing together different approaches and perspectives about the best ways to create more and better jobs. Happy holidays and all the best in the New Year!