The Guardian June 28, 2000


ILO Report:
World-wide poverty, unemployment

A hard-hitting report just released by the International Labour 
Organisation (ILO) entitled World Labour Report 2000 says that 
increasing globalisation and trade liberalisation are creating greater 
insecurity for many income earners. The report is a damning indictment of 
the economic rationalist policies either willingly implemented by 
governments or forced on them by the IMF and the World Bank.

Without going into discussion in the report on the merits of the capitalist 
and socialist systems, the report shows the dramatic decline in the 
standards of living and the level of social security of the people of the 
former socialist countries following the overthrown of socialism in the 
Soviet Union and the countries of Eastern Europe.

The report records that of the 150 million people who are unemployed in the 
world, 75 percent do not have any form of unemployment protection.

"Even the world's richest countries in Europe and North America have 
reduced protection provided by unemployment insurance in the 1990s."

France and Germany are among the small group of European countries that 
have the most generous unemployment protection while Australia and New 
Zealand are listed among the countries with a "medium level" of 
unemployment benefit.

The ILO report says that the US, Canada and Britain are rated low because 
the duration of unemployment benefit payments is short and cuts out 
entirely in less than 12 months.

No protection

The report paints an extremely gloomy picture for most countries. "The vast 
majority of the population in developing countries, including informal 
sector wage earners and self-employed, have no social protection 
whatsoever."

The ILO Director-General Juan Somavia says that "Societies which do not pay 
enough attention to security, especially the security of their weaker 
members, eventually suffer a destructive backlash."

He notes that millions of people "can look forward to neither pensions nor 
to health insurance benefits. They are reluctant or simply unable to seek 
help from social assistance schemes where these exist."

Mr Somavia calls for the development of "tax financed social benefits 
systems."

Giving dramatic figures of the world-wide situation the report says that 
the number of people living in extreme poverty around the world has 
increased by 200 million in just the last five years.

* 850 million people work less than they want or earn less than a living 
wage;

* Poverty is one of the major factors driving 250 million children into the 
labour force;

*In certain developed countries, rates of divorce have increased up to 500 
percent over a 30-year period, meaning that many more children are living 
in single-parent households.

The report records that "Changes in family structure have combined with 
other developments, notably rising unemployment and inequality, to produce 
a steep rise in child poverty rates.

In almost all OECD countries (that is, the developed industrial countries), 
the protection provided by unemployment benefit systems are being cut back 
by tightening eligibility rules, reducing the duration of benefits and, as 
in Australia with Work for the Dole schemes, making benefits conditional on 
participation in training, the acceptance of jobs deemed suitable by 
governments and on increasing the intensity of job-search activities.

Unemployment unknown

For most countries in Central and Eastern Europe, (the former socialist 
countries) "unemployment as such was virtually unknown prior to the 
collapse of State-controlled economies." In the early years of the 
transition period (from socialism to capitalism) when unemployment was 
still low, many countries in the region established funds that provided 
unemployment benefits and labour market support. But rising unemployment 
soon put these systems under strain in Bulgaria, Hungary, Poland and 
Slovakia, leading to tighter eligibility rules, lower levels of 
replacement, shorter duration of benefits and lower beneficiary rates.

Growing impoverishment

This, says the report, "has led to growing impoverishment of those who are 
without work." Throughout the region, "not more than half of the unemployed 
receive either unemployment benefits or social assistance".

The ILO says that employment protection legislation in Central and Eastern 
European countries remains generally strong "mainly because of their 
socialist past," but that the situation is changing in some countries quite 
markedly. Laws are being modified to relax the procedures for hiring and 
firing and enforcement legislation is often "lax in the quickly growing 
private sector where unions are weak and many workers do not know their 
rights."

Among the Asian countries the report says that only four Asian economies  
China, Mongolia, the Republic of Korea and Hong Kong, China  "had any 
form of unemployment benefit scheme".

Health, old age

On questions of health and old age the ILO report is equally damning of the 
present situation.

It says that "Mortality rates are higher for the poor than for the rich at 
all ages, but that differential is particularly high during infancy and 
childhood. From 0 to 4 years, mortality in the 20 percent of poorest 
countries of the world is nine times higher than for the rich and for those 
aged 5 to 14, it is ten times higher."

As for old age the ILO report says that many developing countries only 
recently began to develop pension systems and some nations still have not 
instituted any scheme to protect retired workers. "Old age still spells 
insecurity for certain groups of the population in old age even in the 
industrialised countries."

People who have worked in the informal sector, predominantly women, are 
likely to have very low incomes in old age and become dependent on public 
assistance.

The ILO concludes that "contributory social security schemes remain the 
instrument best suited as the main source of retirement income for workers 
in the vast majority of countries ... Top priority must be given, by civil 
society, as much as by the State, to finding the most effective means to 
bring social protection to the majority, especially in developing 
countries, who still go without.

"An efficient economy and an effective system of social protection are both 
essential for the attainment of income security and a stable society", says 
the report.

The ILO gives a commitment to work "unstintingly for a world in which all 
workers benefit from an affordable level of social protection."

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