Wednesday, January 21, 2015

ILO: Australia Needs Factories

The International Labour Organisation says global unemployment rose from 5.5 per cent to 5.9 per cent when the GFC hit, and there are no signs of it falling back.

The ILO has issued its annual report on employment and estimates that approximately 31 million jobs have been lost or not created between 2007 and 2014. 

The organisation estimates the number of jobless will continue rising until at least 2019, above the current count of 200 million people.

ILO economist Moazam Mahmood has told the AM program the gap between rich and poor is also widening.

He said that even the US jobs recovery has been overstated, with the labour force participation rate dropping from 66 to 63 per cent. 

"Quantitative easing has certainly worked, but it is also the drop, the huge drop, in the labour force participation rate which has brought down the US unemployment rate from 10 per cent down to 5.6 per cent," said Dr Mahmood.

He also said Australia has a lot of work to do to prevent unemployment continuing to rise further above 6 per cent.

The most recent official figures showed unemployment dipping to 6.1 per cent in December after hitting a 12-year high of 6.3 per cent in October.

However, Dr Mahmood said that fall could be short-lived if Australia does not urgently address the loss of manufacturing work.

"Your services sector is a compensation, but services do to some extent have to rely on manufacturing, and I think that Australia will have to think in terms of competitiveness and will have to think in terms of some investment to generate a domestic economy which is based a bit more on manufacturing," he argued.

"I have a feeling that now you have to define manufacturing much more in terms of all the related design, all the ICT incorporated aspects of manufacturing.

"So there's a lot more of the revision of the idea of manufacturing, but it still is making things. It still is making widgets."


No comments: