Labour ministers from G20 countries meeting in Melbourne on Wednesday face a reality test to tackle global unemployment as 81 million jobs need to be created by 2018 to close the massive jobs gap caused by the global financial crisis.
Sharan Burrow, General Secretary, International Trade Union Confederation said ‘business as usual’ means inequality is set to deepen in G20 countries and a worsening slump in wages will slash demand unless Labour Ministers take action.
New research released ahead of the Labour ministers meeting shows economic growth in G20 countries will rise by up to 5.84% by increasing wages and raising public investment in social and physical infrastructure by 1% of GDP - compared to business as usual.
Union leaders from Australia, Europe, Indonesia and the United States will call on employment ministers from around the world to raise wages, invest in infrastructure and reduce inequality during a consultation with the Ministers on Wednesday 10 September.
"The G20 Finance Ministers have set a target of two percent of growth above expectations over the next five years. The question is how to get there,” said Ms Burrow.
"This new research shows 33 million jobs could be created by coordinating wage increases and investment in infrastructure and unions will be urging Governments globally to act on it.”
An International Trade Union Confederation global poll found that 68 per cent of people in fourteen countries said their government is bad at tackling unemployment.
In Australia, 57 per cent of respondents said the Government is doing a bad job at tackling unemployment, which has reached a 12 year high of 6.4 per cent. Eighty per cent of Australian respondents also said their income had stagnated or fallen behind the cost of living.
"These findings should serve as a warning to the Abbott Government that Australians will not tolerate unfair budget cuts to the pension, unemployment benefits, healthcare and education spending, nor workplace laws that lower wages" said ACTU President Ged Kearney.
"People across the world are facing serious financial pressure with falling or stagnating wages, said John Evans, General Secretary TUAC and ITUC Chief Economist.
"More than one in two working families in fourteen countries that constitute half the world's population cannot keep up with the rising cost of living.
"The wage share in national income has been falling in most G20 countries for more than two decades and this is now a major drag on growth. The OECD Employment Outlook released last week showed this is now damaging to growth and job creation.
"Our simulations show if policies remain unchanged, a 1%-point simultaneous decline in the wage share in the world leads to a decline in the global GDP by 0.36%-points."
Mr Evans said demand in the world economy in aggregate is "wage-led" and minimum living wages and collective bargaining are a key part of the solution for creating resilient and inclusive growth.
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