The Great Recession of 2007-2009 destroyed some 30 million jobs around the world — 22.5 million of them in advanced economies like Canada, the United States, Europe and Japan — and little progress is being made in bringing that number down.
It’s why the head of the International Monetary Fund, Dominique Strauss-Kahn, told a recent conference in Norway that “the labour market is in dire straits. The Great Recession has left behind a wasteland of unemployment and this devastation threatens the livelihood, security and dignity of millions of people.”
Moreover, he said, “we must acknowledge that the crisis will not be over until unemployment decreases,” adding that “we must not expect that growth alone will automatically create the jobs we need and set job creation as a priority using all the available policy tools.”
These can range from temporary job subsidies and new initiatives in job training and skills upgrading to promoting healthy financial institutions, public spending on infrastructure, supporting new businesses, pursing open trade and investing in innovation.
The task ahead is made all the more challenging because the world’s labour supply continues to grow.
The International Labour Organization estimates that labour force growth will add more than 45 million jobseekers to the global labour force each year, which means that over the coming decade more than 440 million new jobs will be needed to absorb new workers entering the labour force. Additional jobs on top of that will be needed to reverse the increased unemployment resulting from the Great Recession.
Although the Canadian picture is brighter than in the U.S. and a number of European countries, we have no room for complacency. Our unemployment rate was 8.1 per cent last month, compared to 6.5 per cent August 2006, before the Great Recession had begun.
While we created 727,500 jobs between pre-recession August 2006 and early-stage recovery in August 2010, most of those jobs — about 503,000 of them — were in the public sector. Health and education accounted for nearly half of all new jobs while growth in public administration accounted for another 18 per cent of new jobs. Moreover, of the total new jobs created, 64 per cent were part-time jobs. In the private sector, manufacturing lost about 348,000 jobs.
Young Canadians, 15 to 24, have had a rough time, especially those who are no longer considered to be in the student population — this group includes a broad range of young people, from recent college and university graduates pursuing their first jobs to high school grads and dropouts.
In fact the costs of the Great Recession are huge, and as Mark Carney, governor of the Bank of Canada, acknowledged in a recent lecture, “much of the cost has been borne by countries, businesses and individuals who did not directly contribute to the fiasco.” Moreover, “if what’s past is prologue, growth will be lower and unemployment higher for years to come.”
A new report from the International Monetary Fund and the International Labour Organization — The Challenges of Growth, Employment and Social Cohesion — also warns that “the scars of this distress in labour markets could last for a very long time” and contends there is an urgent need to translate the recovery into strong, sustainable and equitable growth that provides good jobs.
In the meantime, “the cost to those who get unemployed could be a loss in earnings not just today but persisting 15 to 20 years into the future; reduced life expectancy of one to 1.5 years; and lower academic achievement and earnings for their children. And unemployment is likely to reduce social cohesion, a cost that all will bear,” the report warned.
David Crane is a syndicated Toronto Star columnist. He can be reached at crane@interlog.com