The International Labour Organisation’s (ILO) Employment Policy expert, Sher Verick, in this interview with CHRISTIAN APPOLOS, speaks about the reality of employment challenges in the world of work and highlights certain approaches countries must adopt to tackle unemployment.
Let’s start with you giving a brief overview of the extent of the major employment challenges facing the world of work today and some of the policy implications we are looking at to deal with them.
Following the COVID-19 pandemic, which deeply impacted labour markets, we experienced an uncertain and incomplete recovery in 2022, in particular, in light of those headwinds that came from geopolitical tensions and the cost-of-living crisis. But moving into 2023, we actually saw an improvement in the labour market around the world.
The unemployment rate was down to 5.1 percent in 2023. Labour force participation rates have improved as well. However, I would caution interpreting that as only good news because actually this picture masks disparities between advanced and developing economies. In fact, in advanced economies, labour markets are very tight now. As we see in Europe and in other parts of the world, unemployment rates are down, even below that 5.1 global average. In some countries they are at record lows and even for young people; we see that in advanced economies.
But for developing countries, there has been far less policy support over 2022, 2023. Fiscal space has been reduced and now 39 low-income countries are in debt distress or high risk of being so. So, what are the policy implications? For advanced economies, the challenge is to overcome those labour market shortages and get people into the labour markets and look at skilling. But for developing countries, it is really about dealing with that incomplete recovery and that challenge that has emerged as a result of the lack of fiscal space.
What role can employment policies play in addressing existing employment challenges and establish entry points to address future ones like digitalisation and climate change? We haven’t solved all the previous problems now we are facing new ones. What is your take on this?
Indeed, we haven’t solved all the previous problems. If you look at what the ILO has been doing over the last few decades, we have been supporting countries on employment policies, which are comprehensive approaches that address multifaceted labour market challenges. This is done in Kline with our Convention 122 on Employment Policy, which, by the way, is turning 60 this year. As stated in that Convention and through the approach we take on employment policy in recent times, we look at not only job creation, which is absolutely essential, but also how to improve the quality of employment and the access to jobs and that is based on evidence and social dialogue. This is very key to the ILO’s approach. Of course, this remains as relevant today as it was 60 years ago, but as you pointed out, we are facing also new challenges such as digitisation and Artificial Intelligence.
A lot of people are asking today, “Well, will this mean the end of certain jobs? What is going to happen to employment for young people? What skills are going to be needed with this rapid change in technology?” We also have climate change, which is an existential crisis, which requires major changes in how we run our economies. But indeed, as you pointed out as well, we still have those old challenges. We have informality; almost 60 percent of the workforce is still informal, but that also includes some of the new forms of informal jobs which arise on the digital labour platforms, et cetera. We have gender disparities, the well known gender wage gap, which is around 20 percent and it persists at this level even in advanced economies. We have those challenges for youth. We have the broader challenge of structural transformation that we have discussed before.
Now of course, in response to both the new and persisting challenges, we need to learn from our approaches on employment policies and also adapt them. We cannot continue to use necessarily the same modes and same approaches, but we need to look and find new ways to tackle those issues to address both the opportunities and risks that emerge and Al is a good example of that.
One of the things that you did mention was that some governments are doing the best they can, given fiscal and budgetary constraints and lack of resources. So, what are the trends that you are seeing in policymaking in this context and what are some of the hard choices that need to be made?
This is a really important point because what we see around the world through ILO’s support in interacting with countries is that governments are rightly focusing much more on the implementation of policy, which means looking at how policies are coordinated, what is the capacity, what are the resources, the budget that are allocated to policy. This also is reflected in ILO’s new guidance on many of these issues. I have mentioned already, fiscal space is much tighter. Debt stress is evident in many developing countries and one very sobering statistic I read recently from a UN report was that approximately 3.3 billion people live in countries that spend more money paying interest on their debts than they spend on education or health. That is the reality that many developing countries are in the current situation.
Last year, we also released new guidelines on employment expenditure reviews, where we looked at how countries were allocating budgets to their employment policy objectives. This was based on work done in six countries and really shone a spotlight onto the extent budgets are aligned with policies. A very clear finding revealed that most of the policies that are adopted in terms of employment policies were not well reflected in budgets. This is a real challenge for implementation in any time, but in particular, of course, in a time when there is very tight resources and within government competition for scarce resources. From our perspective, given this tight fiscal space, the focus now is to be on developing more effective, realistic and pragmatic approaches to employment policies.
Can you give us one or two practical examples of how national employment policies have affected people and jobs?
Well, let me give you two examples, drawing from countries where we have worked quite extensively over recent years. The first one is the Philippines. The Philippines government adopted a whole of society approach to develop a national employment recovery strategy during the COVID-19 crisis and this was built on their national development plan and other policy frameworks they had. Now, why I want to use this as an example is not only that they took a whole of society approach, but also in terms of the leadership that was there behind the efforts. It was led by the president, but in terms of the task force that was set up to develop the strategy, it was chaired not only by the Department of Labour and Employment, but also Department of Trade and Industry and the Technical Education and Skills Development Authority (TESDA).
These three arms of government represent the dimensions that I highlighted in the context of the Convention 122 in terms of job creation, the quality of employment and access to jobs. Here, this was very directly addressed in terms of bringing the right parts of government together along with other stakeholders, including social partners, to address the urgency of the employment situation and focus on the recovery strategy moving from 2022 onwards. The goal there was to create two million jobs.
The second example is Morocco. In Morocco, there’s been a lot of work done on employment policies for a long period. They have had a national employment strategy in place since 2015 with a 10-year horizon, which involved also a large array of actors at both central and local levels, including the social partners. Here, there was always a prioritisation of young people, women and the policy aimed at creating at least 200,000 jobs a year in that period. Like the Philippines, there was also very strong leadership here and there was also adaptation of the policy to the regional level and as you can see now, they have been learning from that process through an evaluation and the efforts that were undertaken in that period to move towards a new policy framework.
You have mentioned in the case of Philippines that they created two million jobs and in Morocco there was the goal of 200,000 jobs per year. Overall, do we have any numbers on how many people have benefited even globally from national employment policies that are basically aimed at creating or promoting employment?
This is a very important question and something that I get asked quite regularly. Of course, governments and others are interested to know what impact policies have on the labour market, but the challenge is of course, that these policies are comprehensive framework. There is not just one intervention that leads to an outcome in terms of creating jobs or improving the quality of employment. There is a range of interventions that come together within a framework that is implemented. It is important to see the employment policy as an umbrella to a range of measures and the beneficiaries are reached through these specific measures, particularly the programmes that are rolled out to achieve the goals of the employment policy.
Let me be more specific. In the context of all employment policies, a key implementer is the public employment service. They provide services to support job seekers through registration and matching, along with provision of active labour market programmes, et cetera. I can give you the case of Columbia where the ILO has supported public employment services and in this case, we saw a big increase in the ability for district employment agencies to place people, which went up 2,000 in 2020 to around 75,000 people in 2023.
These are reality the beneficiaries that are getting reached through appropriate programmes and measures at that level, which need to come under the umbrella of an employment policy. That is what is important to remember when we think about where are the numbers, where are the beneficiaries. We need to see the overall framework and then we need to see how this gets translated and implemented into programmes. That is why implementation is so crucial because the policy itself and document itself doesn’t lead to those beneficiaries unless it is properly implemented.
What is your vision for the future? Where are we now and where do we go from here?
Looking at where we are now and really drawing on the issues that we have discussed already, the vision that I have for the future of employment polices is really centred on two dimensions. Firstly, their relevance and secondly their implementation. In terms of the first dimension, relevance, it is clear that we need to adapt our approach to employment policies so that we can respond to not only those persisting labour market challenges such as informality, gender disparities, but also to those new and emerging ones. Clearly, there is a real need already today to respond to the implications of Artificial Intelligence, broader digitalisation changes and climate change as well. It is absolutely critical we look at how employment policy can respond to that, but there we need to be also clear that it is not one type of policy that is going to be able to best suit the country-specific situation.
As we have done for decades, this can involve supporting standalone national employment policies, but it can also mean we strengthen our inputs to help the integration of employment objectives in other policies and strategies. For example, this could be done through the national development plan. It could be done through the digitalisation strategies, which are seeking to address broader set of issues around digitalisation, but needs to also focus on employment, similarity for green and just transition strategies. This is a very important part of looking at the relevance of employment policy.
Secondly, it is about implementation, as I have already stressed multiple times, but I am going to stress again because it is absolutely critical that we learn more from our experiences on the formulation implementation of employment policy. We build on that, have better monitoring and evaluation of policy, we strengthen our evidence, continue to draw on social dialogue, but absolutely critical is the link to financing, as I have pointed out a number of times. We need that in order to ensure that employment policies are implemented through the different measures that I have highlighted. These are the two elements that I would focus on, the need for relevance and implementation and in my mind, the next generation of comprehensive employment policies will need to serve both purposes.
ALSO READ: Breaking: Gov Obaseki approves N70,000 minimum wage