Jobs Slowly Recovering From Crisis, Favoring Higher Skills

Global employment finally recovering from crisis, albeit unevenly

Migration, technology pushing workers to higher-skilled jobs

Globalization and technology exacerbating inequality

30 million jobs, mostly in advanced economies, were lost during the Great Recession, writes the IMF’s Prakash Loungani in the latest issue of F&D. The world has since recovered slowly and unevenly, with global unemployment finally falling back to its pre-recession rate of 5 1/2 percent.

But the situation remains grim in much of Europe, especially for youth, says the IMF’s Angana Banerji. Most of the increase in youth unemployment stems from feeble economic growth, Banerji’s research finds, so the policy priority should be to boost demand. Indeed, the European Central bank is easing monetary policy and countries are investing in public infrastructure projects.

The story is different in sub-Saharan Africa, where economic growth has been strong and unemployment is relatively low. F&D’s Bruce Edwards writes that there the problem is “transforming the job market from one that has kept people working in small informal jobs and on farms—often for little or no pay—to one that offers more opportunities in the manufacturing and service sectors.”

With sub-Saharan Africa’s working-age population set to double by 2050, it’s urgent that businesses—whether formal or informal—provide many more jobs, and soon. Larger companies would have the advantage of providing tax revenue and social programs such as pensions and health care, but for now, any new jobs would be embraced, wherever they come from.

Moving out

Over 200 million people are unemployed worldwide. No surprise then that some fear immigrants and robots will take the jobs they so desperately need. But obstacles to immigration—geographic, linguistic, and bureaucratic—mean the share of migrants has remained stable since 1960 at about 3 percent of the global population. The limited globalization of the labor force means large wage gaps persist between countries that send migrants and those that receive them; migration has little impact on wages.

Migrants often get blamed for flooding the job market, but the World Bank’s Çağlar Özden writes that they rarely take jobs from natives. If anything, they tend to nudge local workers into higher-skilled and better-paying jobs—as managers for example. Low-skilled migrant workers offer household help that allows educated women to work while their children are young.

Immigration does...