By Mike Caggeso
Associate Editor
Money Morning
The global financial crisis could wipe out 30 million jobs worldwide by the end of 2009, said the International Labor Organization (IOL), an agency of the United Nations.
The best-case scenario would be 18 million jobs lost, which would amount to a global unemployment rate of 6.1%. The loss of more than 50 million jobs lost and a 7.1% unemployment rate would be the worst-case scenario.
If the latter happens, the number of working poor - people who are unable to earn enough to lift themselves and their families above the poverty line ($2 per person per day) - may rise up to 1.4 billion, or 45% of all the world's employed. Worse, some 200 million workers, mostly in developing economies, could be pushed into extreme poverty ($1.25, or less, a day), the ILO report said.
The report goes one step further, saying that those who've managed to keep their jobs should expect earnings and other employment conditions to deteriorate.
"The ILO message is realistic, not alarmist. We are now facing a global jobs crisis," ILO Director-General Juan Somavia said in a news release. "Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession. Progress in poverty reduction is unraveling and middle classes worldwide are weakening. The political and security implications are daunting."
Where It's Worst
As of last year, North Africa and the Middle East had the highest unemployment rates, 10.3% and 9.4%, respectively.
Central and Southeastern Europe countries out of the European Union and the Commonwealth of Independent States (regional organization whose participating countries are former Soviet Republics) had 8.8% unemployment. Sub-Saharan Africa's unemployment was 7.9% and Latin America's 7.3%.
East Asia had the lowest unemployment at 3.8%, and that region was followed by South Asia and Southeast Asia, 5.4% and 5.7%, respectively. Those regions plus Asia-Pacific accounted for 57% of global job creation in 2008.
Developed economies and the European Union, however, posted a net employment creation of negative 900,000 jobs.
Of course, while the Asia-Pacific region is creating the most jobs, they and Africa have the highest number of people currently living in poverty. And if unemployment becomes an issue there, that poverty will only deepen.
The ILO said that government-works projects - such as the construction and rehabilitation of roads, bridges, schools, hospitals and public buildings - could help create and sustain employment numbers until the overall job market stabilizes and rebounds.
"While major capital-intensive new infrastructure projects take time to translate into increased employment, labor-based approaches can generate jobs and much-needed infrastructure quite quickly," the ILO's 54-page report said, referring to stimulus packages passed by China, Japan and the United States, the world's top three economies.
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Unemployment, working poor and vulnerable employment to increase dramatically due to global economic crisis