February 2016

By Nancy Donaldson, Director of the Washington, D.C. office of the International Labor Organization, a specialized agency of the United Nations

Republished here from the Milwaukee Journal Sentinel with permission.


Economic growth in the United States is expected to strengthen in 2016 for a third year in a row. What does this mean in terms of jobs? The economy is on the mend and labor market conditions are continuing to improve. The unemployment rate has fallen to 4.9% from its level of 8% in January 2013. At 15.7%, the youth unemployment rate is still high.

Despite a more encouraging picture in the United States, many women and men are working in low-paid jobs and too many people are still jobless. Income inequality continues to rise. Recent evidence suggests that weakening of labor market institutions (including low unionization rates) is strongly linked to the rise in income inequality in the developed economies. In the U.S., a principal source of inequality lies in the labor market, including wages.

On a global level, the International Labor Organization expects that worldwide unemployment will rise in both 2016 and 2017. In January, the ILO annual World Employment and Social Outlook (WESO) forecast reported total global unemployment at 197.1 million people — 27 million more than the pre-crisis level of 2007. Beyond these stark numbers, there is strong evidence that rising income inequality undermines economic growth and employment creation. Almost eight years after the global financial crisis, urgent action is needed to boost the number of decent work opportunities or we risk intensified social tensions.

The ILO is focused not only on job creation but also on decent jobs and the future of work. Today, many people are working in jobs that did not exist 20 years ago. Advances in technology have created and eliminated many jobs, and continues to change the way we work. The emerging "gig economy" includes "work on demand apps" generating workers who drive for Uber and other forms of "crowd work." These are new ways of finding work. New technology enables an employee in Milwaukee to work for an employer in New York or in London. This work can supplement income and create access to work that bypasses discrimination barriers in traditional job seeking.

There also are important issues that come with new forms of work. Policy-makers are carefully considering key questions such as who is an employee and who is an employer. How do basic labor protections such as safety and health, wages and hours and access to health and pension apply to workers in the new economy?

There is much evidence that well-designed labor market and social policies are essential for boosting economic growth and addressing the jobs crisis. If policy-makers tailor current and new policies to extend worker protections and promote new forms of work, communities also can use these tools to tackle inequality and unemployment. Today, a focused effort to strengthen global, federal and state policies promoting decent work is urgently needed.

Apprenticeship is one path to decent jobs for both adults and youths. It addresses skills gaps and labor market shortages and combines on-the-job training with classroom instruction that is often paid and creates a trained workforce ready to enter the workplace. This also benefits employers seeking a skilled workforce.

President Barack Obama has dedicated $175 million to an American Apprenticeship grant initiative that will help 46 public-private partnerships create more opportunities for both workers and employers to participate in apprenticeship programs. At the state level, Wisconsin supports apprenticeship programs with training for 2,500 high school students and incentives for business owners to participate. These state-led and federal programs should be ramped up to provide opportunities to more people, including those in disenfranchised communities.

The recent push in the United States to raise the minimum wage represents an important step toward tackling income inequality, but clearly more measures will be needed to reverse the inequality trend. This should include efforts to close the gender gap, address youth unemployment and inactivity, and integrate immigrant workers into the labor market.

There are no easy answers to fixing inequality, whether in education or employment on the global and local level. As we move into the future, inequality and discrimination must be tackled at the core of our efforts to broaden the decent work agenda and promote inclusive economic growth.