## Battling Global Unemployment: Too Soon to Declare Victory _IMF Blog, January 14, 2015_ ## Source details **Canonical URL:** [Battling Global Unemployment: Too Soon to Declare Victory](https://www.imf.org/en/blogs/articles/2015/01/14/battling-global-unemployment-too-soon-to-declare-victory) ## Other formats - [Markdown version](/en/blogs/articles/2015/01/14/battling-global-unemployment-too-soon-to-declare-victory/index.md) - [Structured JSON version](/en/blogs/articles/2015/01/14/battling-global-unemployment-too-soon-to-declare-victory/index.json) - [Bundle manifest](/en/blogs/articles/2015/01/14/battling-global-unemployment-too-soon-to-declare-victory/bundle-manifest.json) ## Bibliographic details - Authors: Prakash Loungani - Published: January 14, 2015 --- ### Overview - Seven years after the onset of the Great Recession, the global unemployment rate fell to 5.6% in 2014; essentially the same as in 2007, the year before the recession. - The fall in the global unemployment rate is positive, but “mission accomplished” would be premature because OECD members on average still have jobless rates well above pre-recession levels, in sharp contrast to non-member countries. - Global employment growth remains sluggish at about 1.5% a year, considerably lower than the annual rates of 2-2 ½ percent employment growth that prevailed before the crisis. ### Global Jobs Index: construction and findings - The index makes quarterly estimates of employment levels in 64 large economies and aggregates them into a global total. - The countries covered represent about 95% of global GDP and 80% of the global labor force. - For countries without timely quarterly employment data, employment levels are derived by estimating historical relationships between jobs and growth. - The index shows global employment has grown by about 9 percent since the low point of the recession, which translates into 208 million jobs being created. - The index can be used to take the pulse of global labor markets at more regular intervals than before, addressing the lack of timely employment reporting in many countries. ### Relationship between jobs and growth - Job creation generally tracks overall economic growth; this relationship held up well for both OECD and non-OECD countries over the Great Recession. - During 2008 through 2010, countries with output growth (examples: Singapore, Israel, Australia) saw employment growth; countries with output declines (examples: Spain, Ireland) saw employment fall. - The same relationship has largely prevailed from 2011 through today: countries where growth recovered saw employment increase as well. - Example: The U.S. economy grew at an annual rate of nearly 5% in the two middle quarters of 2014, its fastest six-month pace in more than a decade; as a consequence, U.S. employers hired nearly 3 million additional workers in 2014, the most in 15 years. ### Regional specifics and labor-market challenges - In some European countries, real GDP continued to fall during 2010-14 and employment fell as well, leaving unemployment alarmingly high: - Greece and Spain: around 25% - Portugal: more than 14% - Euro area as a whole: 11.5% - Youth unemployment rate: 23 percent in the euro area in mid-2014. - Very weak jobs growth in the European Union, which represents nearly 25% of global GDP, is a factor restraining global employment growth. - Slower economic growth in China (from more than 10% in the middle of the last decade ago to around 7% now) is one of the main reasons for the weakening of the Global Jobs Index in the last 18 months. ### Policy recommendations - Countries need a mix of policies to stimulate both aggregate demand and supply to raise employment growth. - Advanced economies: - Monetary policy should continue to support the recovery in demand. - Policies to reduce public debt must be as growth-friendly as possible. - Emerging markets (where growth is slowing from pre-crisis rates): - Primarily address underlying structural problems, which vary from removing bottlenecks in the power sector to reforms of labor and product markets. - In many countries, there is a strong case for increasing public investment in infrastructure to provide a boost to demand in the short term and to supply (i.e. potential output) over the longer term. ### Key statistics and figures - Global unemployment rate in 2014: 5.6% - Pre-recession (2007) global unemployment rate: 5.6% (essentially the same) - Global employment growth rate: about 1.5% a year - Pre-crisis employment growth rates: 2-2 ½ percent - Economies covered by Global Jobs Index: 64 large economies - Coverage of global GDP by index countries: about 95% - Coverage of global labor force by index countries: 80% - Employment growth since recession low point: about 9 percent - Jobs created since recession low point: 208 million - U.S. GDP growth in two middle quarters of 2014: nearly 5% (annual rate) - U.S. additional workers hired in 2014: nearly 3 million - EU share of global GDP: nearly 25% - China GDP growth: from more than 10% (mid-last decade) to around 7% (now) - Unemployment rates cited: - Greece and Spain: around 25% - Portugal: more than 14% - Euro area as a whole: 11.5% - Youth unemployment in euro area (mid-2014): 23 percent *Source: Battling Global Unemployment: Too Soon to Declare Victory — Prakash Loungani, January 14, 2015* --- ## References - [https://www.imf.org/wp-content/uploads/2015/01/global-unemployment-1.jpg](https://www.imf.org/wp-content/uploads/2015/01/global-unemployment-1.jpg) - [https://www.imf.org/wp-content/uploads/2015/01/global-unemployment-2.jpg](https://www.imf.org/wp-content/uploads/2015/01/global-unemployment-2.jpg) - [tracks](http://blogs.imf.org/2012/04/30/jobs-and-growth-cant-have-one-without-the-other/) - [https://www.imf.org/wp-content/uploads/2015/01/global-unemployment-3.jpg](https://www.imf.org/wp-content/uploads/2015/01/global-unemployment-3.jpg) - [post](http://blogs.imf.org/2014/11/19/growth-an-essential-part-of-a-cure-for-unemployment/) _Source: https://www.imf.org/en/blogs/articles/2015/01/14/battling-global-unemployment-too-soon-to-declare-victory_