2009 world unemployment could rise by 40 million, says UN

The global economic downturn could see 40 million more people lose their jobs by the end of the year, taking the unemployment rate to its highest in a decade, the U.N. labor agency said Wednesday.

The number of unemployed in 2009 will largely depend on how effective governments' economic stimulus measures are, the International Labor Organization cautioned.

Worldwide unemployment by the end of the year will range between 210 million and 230 million people, the agency said in its annual Global Employment Trends report.

That is a marked increase on the 179 million who were unemployed at the end of 2007 and the estimated 190 million at the end of 2008, the ILO said.

The worst case scenario assumes growth slows rapidly and that an economic recovery will be delayed into 2010.

This would boost the global unemployment rate to 7.1 per cent, a decade high and well above the 2007 rate of 5.7 per cent and estimates for a 2008 rate of 6 per cent. Over the last ten years, the rate has ranged from 5.7 per cent to a peak of 6.3 in 2003 and 2004.

ILO Director-General Juan Somavia said that although many governments have started to support their economies, ``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,'' he said.

The latest predictions are based on an economic growth forecast of 2.2 per cent, published by the International Monetary Fund in November and expected to be adjusted downwards.

``Unemployment will rise with a downward revision, but I believe it will still fall within the range,'' said Lawrence J. Johnson, who heads the ILO's employment trends unit.

The report had originally forecast world unemployment would range between 198 million and 230 million people, but Somavia said the lowest estimate has probably been overtaken by events.

If the worst case scenario materializes, around 200 million more people would become working poor, unable to earn more than $2 per person a day.

In this outlook, the total number of working poor would be 812 million, or 26.8 per cent of the world's work force, the report said, using poverty estimates by the World Bank.

In 2007, some 609.5 million were working poor, 20.6 per cent of the world's work force at the time.

In addition to fiscal and monetary interventions, the world economy also needs creative measures improving the social situation of workers, the report said.

``There is a need to focus measures on vulnerable groups in the labor market, such as youth and women, who are most likely to be pushed into poverty and find themselves trapped there for many years,'' it said.

Governments should give special attention to small and medium companies because they provide the bulk of jobs and are most affected by the financial crisis, the report said.

Agencies