1. Global economic, employment and social trends
Study Visit of the delegation of
the Social Insurance Fund of the Russian Federation
Global economic, employment and social trends
Raymond Torres
Director, Research Department
International Labour Organisation
28 September 2015

2. Overview Global employment and inequality trends Changing job patterns
Policy issues

3. I. Global employment and inequality Measurement, trends, and linkages

4. The global economy is slowing…again
Global growth has been revised downwards again and will pick up only moderately next year
Note: The G20 sample is restricted to 18 out of 19 individual countries for which data is available (Argentina identified some inconsistencies in its wage series for some years and has been excluded).
Source: ILO, Global Wage Report 2014/5.
Inequality has continued to widen in many countries, with only brief pauses following the initial phase of Great Recession
There are exceptions such as Latin American countries, which indicates the importance of effective policy interventions.
Source: EIU calculation (July 2015). World: based on 120 countries (excl. countries with limited data coverage)

5. Jobs are missing globally…
But most of them in advanced and emerging economies
In comparison to the baseline, almost 60 million jobs have been lost since 2007
Note: The G20 sample is restricted to 18 out of 19 individual countries for which data is available (Argentina identified some inconsistencies in its wage series for some years and has been excluded).
Source: ILO, Global Wage Report 2014/5.
Inequality has continued to widen in many countries, with only brief pauses following the initial phase of Great Recession
There are exceptions such as Latin American countries, which indicates the importance of effective policy interventions.
Source: Based on ILO, WESO Trends, January 2015

6. Labour’s share of total income is declining, G20
Note: The G20 sample is restricted to 18 out of 19 individual countries for which data is available (Argentina identified some inconsistencies in its wage series for some years and has been excluded).
Source: ILO, Global Wage Report 2014/5.
Inequality has continued to widen in many countries, with only brief pauses following the initial phase of Great Recession
There are exceptions such as Latin American countries, which indicates the importance of effective policy interventions.
Note: Market prices (AMECO). The 9 countries are Australia, Canada, Germany, France, Italy, Japan, Spain, the United Kingdom and the United States and the 11 includes the Republic of Korea and Mexico.

7. Income inequality is closely related to labour income shares
Changes in the labour income share vs. Gini index (since 2000)
Note: (a) Trends in the labour share are sensitive to adjustments in some countries such as Brazil and Mexico: * unadjusted, ** adjusted ; (b) Russia * (since 2000) and Russia ** (since 1990); (c) Italy* (1995 onwards); (d) Indonesia, Saudi Arabia and Turkey are not included due to data constraints

8. Redistribution has become less effective
Gap between market and disposable income inequality has widened since 2007
Gini index in selected G20 countries
Note: The G20 sample is restricted to 18 out of 19 individual countries for which data is available (Argentina identified some inconsistencies in its wage series for some years and has been excluded).
Source: ILO, Global Wage Report 2014/5.
Inequality has continued to widen in many countries, with only brief pauses following the initial phase of Great Recession
There are exceptions such as Latin American countries, which indicates the importance of effective policy interventions.
Note: Data for EU and related countries refer to 2011, not 2012.

9. II. Changing job patterns

10. Shifting patterns of work
Middle class jobs are disappearing in advanced economies…but not only there
Source: ILO, WESO Trends, January 2015

11. Globally, there is a lack of quality jobs
Self-employment is the dominant form of employment outside advanced economies…
Source: ILO, WESO: The changing nature of jobs, May 2015

12. Income from different income sources
…and labour income provides the main income in most countries…
Source: ILO Research Department estimates based on household surveys

13. Unequal coverage by type of protection
…as social protection remains underdeveloped in most
Source: ILO, WESO: The changing nature of jobs, May 2015

14. Global labour force declines
Financing social protection relies on fewer and fewer people in the labour force
Source: ILO, WESO Trends, January 2015

15. III. Policy issues

16. Improving job quality helps to improve funding base!
Fostering job quality
Improving job quality helps to improve funding base!
Lack of formal employment undermines sufficient funds in emerging economies
Lack of coverage is the result of both limited access for workers and failing resources
Decrease in full-time permanent employment in advanced economies has put strains on social security finances
Spending on social protection remains high given past comitments
But funding base has been eroded by increase temporary and part- time employment
Fostering job quality is therefore essential to provide a stable and sustainable funding base for social protection
Simple elasticities using GDP (IMF) and Employment (GET)

17. Expanding social protection
More encompassing social protection can improve fiscal sustainability
Social protection provides essential buffer against both individual and macroeconomic shocks
Extending unemployment benefits has been shown to dampen adverse employment effects during a downturn
Faster economic recovery due to comprehensive social protection
Limits the social fall-out from the crisis…
…and helps securing public finances by restoring budget equilibrium more rapidly
Simple elasticities using GDP (IMF) and Employment (GET)

18. Finding new sources for public finances
Recent consolidation efforts have eroded the basis for public finances
Cuts in taxes and social security contributions particularly prevalent in advanced economies  will need to be reverted
Simple elasticities using GDP (IMF) and Employment (GET)
Source: ILO, World of Work Report: Better Jobs for a Better Economy, 2012