## The Global Jobs Crisis— Sustaining the Recovery through Employment and Equitable Growth

_IMF News, April 13, 2011_

## Source details

**Canonical URL:** [The Global Jobs Crisis— Sustaining the Recovery through Employment and Equitable Growth](https://www.imf.org/en/news/articles/2015/09/28/04/53/sp041311)

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## Bibliographic details
- Authors: Dominique Strauss-Kahn
- Published: April 13, 2011

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### Overview
- Speech by Dominique Strauss-Kahn, Managing Director, International Monetary Fund.
- Washington, April 13, 2011.
- Core message: Recovery is present but not delivering enough jobs or broadly shared growth; unemployment and inequality threaten economic, financial, and political stability.
- Noted consequence: "The crisis threw 30 million people out of work. And over 200 million people are looking for jobs all across the world today."
- Emphasis on linking employment and equitable distribution to macroeconomic and political stability.

### Employment: diagnosis and policy actions
- Diagnosis:
  - Recovery in advanced economies is not creating sufficient jobs.
  - Youth are hit especially hard; short-term unemployment risks becoming long-term and creating a "whole lost generation."
- Key policy prescriptions:
  - Financial sector reform and repair to "put the banks back in the service of the real economy" and direct credit to small and medium-term enterprises—described as "key drivers of employment and indeed of growth."
  - Supportive monetary policy while unemployment remains high and underlying inflationary pressures are weak.
  - Fiscal policy should place advanced countries on "sustainable medium-term paths" but fiscal adjustment must be implemented "with an eye kept keenly on growth" to avoid raising long-term unemployment.
  - Direct labor market policies: decent unemployment benefits combined with education and training to help the unemployed adapt to a changing economy, especially when job losses concentrate among the young and the unskilled and when unemployment becomes long-term.
  - Move beyond the binary contrast of "flexibility" versus "rigidity" and evaluate whether policies effectively create and sustain jobs.
  - International cooperation on financial sector regulation, cross-border resolution, and global rebalancing; emerging markets should shift toward domestic demand supported by a vibrant middle class.

### Inequality: links to stability and growth
- Findings:
  - IMF research indicates inequality can make countries more prone to financial crises, "especially if associated with a large financial sector."
  - IMF research also shows "sustainable growth over time is associated with a more equal income distribution."
  - Inequality is at record highs in too many countries.
- Policy recommendations:
  - Reduce inequality and ensure fairer distribution of opportunities and resources.
  - Combine strong social safety nets with progressive taxation to dampen market-driven inequality.
  - Invest in health and education.
  - Support collective bargaining rights to address stagnating real wages.
  - Use social partnership frameworks to share both growth gains and adjustment pains fairly.

### Role of the IMF
- Shifts and actions described:
  - Jobs issue is becoming more central in IMF surveillance, as reflected in the WEO.
  - IMF research on inequality has been highlighted and the institution has supported "a tax on financial activities."
  - Greater attention to the social dimension in IMF programs—protecting social safety nets for the poor and supporting equitable burden-sharing.
- Collaborative initiatives:
  - Follow-up to the Oslo conference organized jointly with the ILO and the Norwegian government.
  - Working with the ILO to better understand policies behind job-creating growth.
  - Supporting social partnership consultations between labor, employers and the government in three countries: Bulgaria, the Dominican Republic, and Zambia.
  - Working with the ILO toward building effective social protection floors in low-income countries.

### Conclusion and normative thrust
- Core assertion: Employment and equity are "building blocks of economic stability and prosperity, of political stability and peace."
- Middle class centrality: Quoting Aristotle—stability depends on a "strong middle class that can propel demand."
- Policy imperative: Place employment and equity "at the heart of the policy agenda" to ensure growth leads to decent jobs and does not concentrate rewards among the few.

### Key statistics and exact figures from the speech
- Date of speech: April 13, 2011.
- Job losses attributed to the crisis: 30 million people.
- People looking for jobs worldwide: over 200 million people.
- Countries explicitly mentioned for social partnership support: Bulgaria, the Dominican Republic, and Zambia.

*By Dominique Strauss-Kahn, Managing Director, International Monetary Fund; Washington, April 13, 2011.*

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## References

- [Dominican Republic and the IMF](http://www.imf.org/external/country/DOM/index.htm)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [Dominique Strauss-Kahn](https://www.imf.org/external/np/omd/bios/dsk.htm)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Video](https://www.imf.org/external/mmedia/view.aspx?vid=903532289001)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp041311_