Bank-born crisis engulfs workers worldwide

PARIS – The global financial crisis has sent a wave of rising unemployment across the world as vulnerable workers suffer from the downturn in economies interlinked by globalisation, experts say.

By (AFP)

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Published: Mon 26 Jan 2009, 9:28 AM

Last updated: Thu 2 Apr 2015, 2:59 AM

The US-born credit crisis that worsened in September has also seen a harsh economic slowdown, with several of the richest countries—including the United States, Germany, Japan and now Britain—sinking into recession.

Shockwaves from the general decline in activity have reached worldwide, hurting big poorer countries whose exports or highly mobile migrant workers have fuelled their recent growth.

In the globalised economy, trouble that hit banks in rich countries has now spread to affect workers, “including in countries that had not committed financial excesses,” Raymond Torres, director of the ILO’s International Institute for Labour Studies, told AFP.

“Apart from the countries directly involved in the financial crisis and those that were already in an economic slowdown, the phenomenon is now hitting countries that are dependent on others through exports, such as China, and through migrant workers, such as Mexico,” he said.

Unemployment is soaring fastest in countries with a highly mobile workforce, sharpening social inequalities at the expense of vulnerable younger or older employees, migrants or those relying on temporary work, experts say.

In China, six million migrants have lost their jobs because of the crisis, according to official data released Thursday. Many of them left their rural homes for jobs in the big eastern cities, but now find factory gates shut.

In 2007 the Organisation for Economic Cooperation and Development (OECD), a grouping of 30 richer countries, recorded its lowest jobless rate in nearly 30 years -- 5.6 percent. But in just a year, the job market has plunged.

The OECD and the International Labour Organisation (ILO) now estimate that the ranks of the jobless worldwide could grow by up to 25 million by next year, possibly reaching a record of 210 million by the end of 2009.

Since a housing credit crisis erupted in the United States in late 2007, sector after sector has fallen victim to the economic fallout.

From giant car makers such as Toyota of Japan to technology firms such as US giant Microsoft and the Swiss banking titan UBS, employers around the world have announced job cuts by the thousands.

Britain, which on Friday confirmed that it had entered recession, is seeing its highest unemployment rate for 10 years, with younger workers among those most affected.

Spain’s unemployment rate surged to a massive 13.91 percent in the fourth quarter of 2008, that national statistics body said on Friday, after years of construction-fuelled growth had driven the rate down.

The United States lost 2.6 million jobs in 2008, according to official figures—the worst year for employment since 1945, with the manufacturing, auto and service sectors particularly hard hit.

Stefano Scarpetta, a top unemployment specialist at the OECD, warned that amid the uncertainty of such a spectacular downturn, “the first workers to be affected are the temps.”

Also at high risk, he said, are “the young or elderly workers, immigrants or those with weak qualifications... (who) even before the crisis had enormous difficulty in some countries.”

Japanese companies have announced thousands of lay-offs in recent weeks among contract or temporary employees—many of them migrant workers from Brazil.

A Japanese government survey last month said that more than 85,000 temporary workers have lost or know they will lose their jobs by March.

“In countries with lots of less secure working contracts, unemployment spreads quicker.” said Torres of the ILO.

“A rise in unemployment of this size is going to touch the whole world, but it is the most vulnerable, the young or the less qualified, who will find it hardest to find a decent job after the crisis.”


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