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ILO advocates labour reform to tackle poverty

Jan 23, 2008

International Labour Organisation’s new report says that ending poverty in South Asia will require labour market reforms coupled with economic progress. The report notes that instances of extreme poverty have impressively come down in the last decade but proportion of working poor continues to remain high in the region.

New Delhi: South Asia could end poverty in a generation, but only if economic development is accompanied by inclusive labour market policies, according to a new report by the International Labour Organisation (ILO).

The ILO's 2008 Global Employment Trends (GET) report notes that recent economic growth has led to "impressive" poverty reduction in South Asia.

Extreme working poverty “an income of less than US $1 per day” fell by 20 percentage points in a decade (from 53% in 1997 to 33% in 2007, the greatest decrease of any region of the world.

However, the proportion of working poor “an income of less than US $2 per day” remains high, with eight out of 10 workers, 478 million people, in this category.

Only sub-Saharan Africa has a higher proportion.

The persistence of working poverty is mainly the result of continuing low productivity levels, the report says, with resulting wages too low to lift workers out of poverty.

While there has been a fall in working poverty, the share of people in vulnerable employment (non formal work such as unpaid family work or own-account work) remains the highest in the world, with seven out of 10 workers in this group.

Many of these workers have little or no social protection against economic downturns, and no formal insurance to protect them in times of personal or family crisis.

Many of these workers have little or no social protection against economic downturns, and no formal insurance to protect them in times of personal or family crisis.

South Asia's countries are different from other parts of Asia in that they remain strongly dependent on agriculture. While there has been a rapid decrease in agricultural employment since 1997 - the fastest decline in the world - agriculture still employs almost half of all workers in the region.

The region's industrial sector has seen the largest increase in jobs, from 15.3% of total employment in 1997 to 21.7% in 2007. In the same period the services sector grew from 25.2% to 30.3%, less than in many other regions of the world.

Women continue to represent untapped potential, with very low labour force participation rates; in 2007 of every 100 women of working age, only 35 were actually working. The gender gap in education also remains large and threatens to constrain women's participation in the workforce even more in future.

What makes the situation of women even worse is that those who do enter the workforce are also more likely to be unemployed. The female unemployment rate was 5.8% in 2007, compared to 4.8% for men.

Looking forward, the report warns that the region must prepare itself "for an economic situation less favourable than today's" by putting in place social protection mechanisms to ensure people do not fall back into poverty.

South Asia "still has an enormous deficit in decent work" the authors say. The challenge is not so much the creation of jobs but the creation of decent jobs which ensure people are neither in poverty, nor vulnerable to it.

South Asia "still has an enormous deficit in decent work" the authors say. The challenge is not so much the creation of jobs but the creation of decent jobs which ensure people are neither in poverty, nor vulnerable to it.

This requires more inclusive, formal labour markets and more investment in education and other forms of human capital.

But, it concludes, "Given the strong economic growth, the region now has the potential to put forward the necessary reforms and investments in human capital" to reduce poverty and support continued economic development.

For more information please contact:

 

Neelam Agnihotri
Tel. 011- 24602101 - 02 - 03
Email: neelam@ilodel.org.in

Source : ILO
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