Saving the Lost Generation
IMF Blog, September 14, 2010
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Bibliographic details
- Authors: Dominique Strauss-Kahn
- Published: September 14, 2010
Context and scale of the crisis
- Oslo conference brought together global leaders from government, business, trade unions, and academia to discuss the jobs crisis.
- 210 million people currently out of work worldwide—the highest level of official unemployment in history.
- The ILO estimates that, over the next 10 years, more than 440 million additional jobs will be needed to absorb new entrants to the labor force.
- Since 2007, 30 million more people have become unemployed.
Human and social consequences highlighted
- Persistent loss of earnings.
- Reduced life expectancy.
- Lower educational achievement for the children of the unemployed.
- Risk of a "lost generation" of young people with unemployment rates much higher than older groups.
- Difference between growth and employment outcomes: an economic recovery that does not translate into jobs will not mean much to most people; whether unemployment is 10 percent or 5 percent is a big deal.
Main policy takeaways (author’s summary)
- The financial crisis cannot be declared over until unemployment decreases.
- Need growth that increases employment—output growth is the single most important determinant of employment growth.
- Job creation must be a priority and use all policy instruments available.
Policy instruments and best practices discussed
- Use fiscal and monetary policies to support as strong an output recovery as possible, while recognizing advanced economies may need to stabilize or reduce high public indebtedness without impairing growth and jobs.
- Financial sector reform aimed at making the sector more effective in supporting the real economy (for example, financing small businesses with limited crisis-era access to credit).
- Labor market measures and active policies:
- Step up placement services.
- Expand labor market programs aimed at improving skills and job search.
- Allow firms to retain workers while reducing hours and wages to spread downturn burden more evenly.
- Extend unemployment benefits.
- Target subsidies at specific groups such as the long-term unemployed and youth to stimulate job creation.
International cooperation and projections
- Consistent policy actions through G-20 deliberations helped avoid recession turning into depression and prevented further job losses.
- Appropriate coordinated action over the next five years could increase global GDP by 2.5 percent, creating tens of millions of jobs (IMF analysis for the G-20).
- Increased cooperation between the ILO and IMF can boost international coordination overall.
Specific IMF–ILO collaborative focus agreed in Oslo
- Focus on policies that promote job-creating growth.
- Explore the concept of a social protection floor for people living in poverty and vulnerable groups—within a sustainable macroeconomic framework.
Conclusion and forward-looking emphasis
- Need to think differently and more creatively about:
- New economic forces in the post-crisis world.
- Better integration of employment policies with macroeconomic policies, domestically and internationally.
- Developing a wider array of policies and programs to provide work for all who want it.
- Oslo marked the beginning of that kind of thinking and strengthened collaboration between the ILO and IMF.
Source: Dominique Strauss-Kahn, "Saving the Lost Generation", September 14, 2010.
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- Спасение потерянного поколения, Доминик Стросс-Кан -- 14 сентября 2010 года