UN Human Rights Treaties

United Nations
E/CN.5/2007/2
Economic and Social Council
Distr.: General
9 November 2006
Original: English
Commission for Social Development
Forty-fifth session
7-16 February 2007
Agenda item 3
Follow-up to the World Summit for Social
Development and the twenty-fourth special
session of the General Assembly
Promoting full employment and decent work for all
Report of the Secretary-General*
Summary
The present report has been prepared pursuant to Economic and Social Council
resolution 2006/18, in which the Council decided that the Commission for Social
Development at its forty-fifth session — the first year of its 2007-2008 cycle —
would review the theme “Promoting full employment and decent work for all”,
taking into account its relationship with poverty eradication and social integration.
* The present report draws upon the discussions of the Department of Economic and Social Affairs
Development Forum on Full Employment and Decent Work, held in New York on 8 and 9 May
2006 (http://www.un.org/Docs/ecosoc/meetings/2006/forum/Forum.htm). Sections A and B of
chapter I are drawn from the International Labour Office, Global Employment Trends Brief
(Geneva, January 2006) and Changing Patterns in the World of Work (Geneva, 2006). Parts of the
report will be used for the preparation of the forthcoming Report on the World Social Situation
2007.
06-61161 (E) 281106
*0661161*
E/CN.5/2007/2
06-2 61161
Contents
Paragraphs Page
I. Trends in full employment and decent work since 1995 . . . . . . . . . . . . . . . . . . . . . 1–64 3
A. Global and regional trends in labour and employment . . . . . . . . . . . . . . . . . . 2–9 3
B. Global trends in employment dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–24 4
C. Trends in the workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25–32 7
D. The enabling environment for full employment and decent work. . . . . . . . . . 33–46 9
E. Labour market interventions for full employment and decent work . . . . . . . . 47–64 12
II. Full employment, decent work and their impact on poverty eradication . . . . . . . . 65–85 17
A. Growth, employment and poverty alleviation. . . . . . . . . . . . . . . . . . . . . . . . . . 65–68 17
B. Interventions to reduce poverty through employment . . . . . . . . . . . . . . . . . . . 69–85 18
III. Full employment and decent work and their impact on social integration . . . . . . . 86–117 22
A. Social integration and work: the basis for action . . . . . . . . . . . . . . . . . . . . . . . 86–91 22
B. Interventions to promote social integration through employment. . . . . . . . . . 92–93 23
C. Women . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94–96 24
D. Youth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97–101 25
E. Older persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102–106 26
F. Persons with disabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107–111 27
G. Indigenous peoples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112–114 28
H. International migration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115–117 29
IV. Continuing challenges for achieving full employment and decent work . . . . . . . . 118–124 29
E/CN.5/2007/2
06-61161 3
I. Trends in full employment and decent work since 1995
1. More than a decade after world leaders committed themselves to address the
challenges of poverty reduction, employment creation and social integration at the
World Summit for Social Development, held in Copenhagen in 1995, the
achievement of full employment and decent work remains a global concern.
Globalization, manifesting itself through increased trade and mobility of financial
capital, has prompted the view that a global marketplace has been created with
“winners” and “losers”. Even as total employment has risen since the mid-1990s,
problems of unemployment and underemployment have worsened. The concept of
decent work — the provision of a sufficient level of income, of income and labour
security, of good working conditions and a voice at work — has yet to be turned into
reality for many people across many nations. The mandate of the World Summit, to
create a world of decent work and full employment as a crucial path to poverty
reduction, remains an unfulfilled global challenge.
A. Global and regional trends in labour and employment
2. Human security is intrinsically related to employment. Several aspects of
employment, such as wages, income and job stability, and decent work have a direct
effect on people’s vulnerability. Unemployment, underemployment and job
insecurity are interlinked to income insecurity and poverty in a vicious circle in
which one phenomenon reinforces the others. However, relying exclusively on the
unemployment rate as an indicator of employment conditions masks the full extent
of vulnerability, especially in developing countries. Unemployment figures alone
fail to reveal pervasive underemployment, employment in the informal sector and
the existence of large numbers of people who, despite working, remain below the
poverty line.
3. Notwithstanding these conceptual issues, between 1995 and 2005, the global
labour force, consisting of people who were either working or looking for work,
grew by some 438 million workers or 16.5 per cent, to over 3 billion, based on
International Labour Organization (ILO) estimates. That labour force represented
about two thirds of the 4.6 billion people of working age (15 years old and over) in
2005. Since 1995, the number of people in work worldwide rose by 400 million (or
16.3 per cent) to 2.85 billion. However, the unemployment rate worldwide rose from
about 6.0 to 6.3 per cent over the decade. The rise in the unemployment rate
occurred while global economic output grew at the rate of 3.8 per cent per annum.
4. From 1995 to 2005, the number of unemployed worldwide rose 21.9 per cent,
to 192 million people. At the same time, it is estimated that 1.4 billion of those
working did not earn enough to lift themselves and their families above the two
dollars a day poverty line. Among those, 485 million workers and their families
lived below the one dollar a day poverty line.
5. The underlying global demographic forces have a significant impact on
employment. The ageing populations and declining birth rates in developed
countries against the young populations and relatively high fertility rates in
developing countries will inevitably lead to large labour supply and demand
pressures everywhere.
E/CN.5/2007/2
06-4 61161
6. As at 2005, about 84 per cent of the global labour force was found in
developing countries, with Asia and the Pacific accounting for about 60 per cent of
world employment. China and India accounted for 26.0 per cent and 14.8 per cent of
world employment, respectively. With both countries accounting for over 2 billion
people, the increased integration of their two economies into the global trading
system provides an abundant labour supply and dampens wage pressure at the global
level, at least for the production of tradable goods and services.
7. The unemployment rate in developed economies declined from 7.8 per cent in
1995 to 6.7 per cent in 2005.1 This decline in the unemployment rate was attributed
to strong economic growth coupled with a slower increase in labour force growth,
along with increased labour productivity.
8. In Central and Eastern Europe, in East Asia and in Latin America and the
Caribbean, unemployment rates remained more or less unchanged between 1995 and
2005. However, in South-East Asia and the Pacific, the unemployment rate rose
significantly, from 3.9 per cent in 1995 to 6.1 per cent in 2005, reflecting in part the
lingering impact of the 1997 Asian crisis. In the same period, unemployment in
South Asia rose from 4.0 per cent to 4.7 per cent despite annual growth in gross
domestic product (GDP) of 5.8 per cent.
9. Unemployment in Africa is the highest in the world. The unemployment rate in
sub-Saharan Africa worsened from 9.2 per cent to 9.7 per cent between 1995 and
2005, even as GDP in the region grew at 3.9 per cent per annum. The Middle East
and North Africa saw some improvement, with the unemployment rate declining
from 14.3 per cent to 13.2 per cent. In Africa, unemployment is unevenly distributed
across countries, gender and age groups. Dominated by agriculture, the challenges
facing Africa include low productivity, high demographic growth, exacerbating
youth unemployment, and the record toll on the labour force caused by HIV/AIDS
and the brain drain.2
B. Global trends in employment dynamics
10. Global developments over the years, such as the continuation of the economic
integration of countries with economies in transition into the global economy,
technological innovations in data processing and communications, opening of
borders and reduction of trade barriers, along with cheaper and faster transportation,
have resulted in rapid globalization. As a result, the increased mobility of goods,
services, capital and labour has led to shifts in employment dynamics, which are
reflected in global changes in sectoral employment, in the integration of production
systems across borders, increased labour migration — both intra- and crossborder
— and the growth of the informal economy and self-employment.
11. Agriculture remains an important provider of employment for more than
1.1 billion people.3 In sub-Saharan Africa, East Asia, South Asia and South-East
Asia, where 60 per cent of the world’s working-age population lives, agriculture
__________________
1 Organization for Economic Cooperation and Development, OECD Employment Outlook 2006:
Boosting Jobs and Incomes (Paris, 2006), p. 18.
2 Economic Commission for Africa, Economic Report on Africa 2005: Meeting the Challenges of
Unemployment and Poverty in Africa (United Nations publication, Sales No. 05.II.K.9), chap. 2.
3 International Labour Office, Global Employment Trends Brief (Geneva, January 2006), table 5.
E/CN.5/2007/2
06-61161 5
continues to be an important provider of livelihoods for the world’s poor. However,
agriculture’s share of total employment is on the decline, falling from 44.4 in 1995
to 40 per cent in 2005.
12. The industrial sector employed about 600 million, or 21 per cent, of world
employment in 2005. Globally, the sector’s share in total employment has remained
the same in the past decade, though there is a marked decrease in the share of
industrial employment in developed economies.
13. The service sector is the fastest growing sector. Its share of total employment
rose from 34.5 to 38.9 per cent over the last 10 years. The share of employment in
services increased in all regions except the Middle East and North Africa. In 2005,
the service sector employed 1.1 billion people, almost equal to the number
employed in agriculture. If the current trend continues, the service sector globally
will soon overtake agriculture as the largest source of employment. The share of the
service sector in total employment in the developed economies rose from 66.1 per
cent to 71.4 per cent in the past decade.
14. Geographical shifts in employment are evident in both internal migration from
rural areas to cities and in cross-border migration. The shift from the agricultural to
the service sector — increasingly bypassing the industry sector — drives the growth
of rural-to-urban migration. That trend is attributed to push and pull factors such as
poor agricultural earnings, unpredictability of employment in agriculture and better
opportunities and incomes in other sectors. This is particularly true in many
developing countries faced with subsistence farming and stiff competition from
subsidized agricultural production in developed countries.
15. Another growing trend is the continued migration of peoples across borders. In
2000-2005, out-migration from Asia was 1.3 million people, 0.8 million from Latin
America and the Caribbean and 0.5 million from Africa. Net immigration was
largest in North America, with 1.4 million, in Europe, with 1.1 million, and in
Australia and New Zealand, with 0.1 million. This labour movement is taking place,
both on a legal and an illegal basis, driven by attractive wages in developed
economies faced with rising labour shortages.
16. Migration policies favour workers with particular skills, allowing the legal
immigration of workers with skills that are in high demand. Legal migrants, with
valuable skills, are generally able to obtain attractive salaries and good working
conditions, in sectors such as health care, information technology, education,
finance and other fast growing industries. Illegal migrants, however, tend to take on
low-skill jobs (even though they may be well educated), and to work under poor
working conditions mostly in agriculture, construction and household services. In
certain cases, those working conditions may be in violation of the labour laws of the
host countries, as employers take advantage of the inability of illegal migrants to
seek protection from the law.
17. The informal sector has grown in recent years as part of the general shift from
agriculture towards industry and services, and it is estimated that informal
employment accounts for between one half and three quarters of non-agricultural
employment in the majority of developing countries. The share of informal workers
in the non-agricultural labour force ranges from 48 per cent in North Africa and
51 per cent in Latin America and the Caribbean to 65 per cent in Asia and 78 per
E/CN.5/2007/2
06-6 61161
cent in sub-Saharan Africa (excluding South Africa).4 By comparison, the share of
the informal economy in gross national income is 18 per cent in the countries of the
Organization for Economic Cooperation and Development (OECD) and 38 per cent
in countries with economies in transition. However, although the informal sector is a
significant source of employment, it offers workers little in terms of job security,
good working conditions and health insurance and other benefits. In most
developing countries, because the informal economy accounts for such a significant
share of total economic activity, a considerable proportion of the population lives
and works in situations of vulnerability.
18. Self-employment has grown significantly in recent years, in response to
changes in employment practices that have resulted in the breakdown of long-term
employment and the expanded use of flexible short-term contractual labour
arrangements. Employees thus become self-employed contractors operating in small
business enterprises. In developing countries, self-employment outside of
agriculture accounts for 60 to 70 per cent of informal work. The growth of selfemployment
has also been significant in developed economies. In the United States
of America, for example, the number of businesses with no paid employees stood at
18.6 million in 2003, the highest figure in self-employment since its Census Bureau
started releasing these data in 1997. The share of women’s self-employment is
increasing in many developed countries and is an important element in poverty
reduction, for example, in Eastern Europe and the countries of the Commonwealth
of Independent States.5
19. The lack of regulatory oversight in the informal economy exposes workers to
greater risk of abuse, poor working conditions and lack of benefits. Social costs to
societies also include the growth of slums, increased congestion and poor health. To
address that challenge, formalization of the informal economy is typically called for,
although some expect that the formal and informal sectors will co-habit and that the
informal economy is not a transitory phenomenon. It is therefore imperative that
policies weigh the pros and cons of formalization.6
20. In the past, the drive for competitiveness as well as labour and transportation
cost savings have led transnational corporations to relocate manufacturing facilities
to low-cost labour locations. More recently, production and service activities can be
performed in remote locations where they can be most efficiently performed, relying
on innovations in information and communications technology to network the
different processing centres. For example, Japanese, United States and European
manufacturers are using manufacturing facilities in China to supply the global
market. While the trend in international manufacturing has had a longer history,
recently, the offshoring of service jobs has also begun to occur. In addition, there is
increasing internationalization of research and development (R&D), including in
developing countries — traditionally reserved for the home countries of
__________________
4 International Labour Office, Women and Men in the Informal Economy: a Statistical Picture
(Geneva, 2002).
5 Economic Commission for Europe, “Women’s self-employment and entrepreneurship in the
UNECE region”, fact sheet 4, Geneva, 15 December 2004.
6 Basudeb Guha-Khasnobis and Ravi Kanbur, eds., Informal Labour Markets and Development
(Palgrave Macmillan, Basingstoke, United Kingdom of Great Britain and Northern Ireland,
2006), p. 1.
E/CN.5/2007/2
06-61161 7
transnational corporations. The offshoring of R&D opens up some employment
opportunities for the highly skilled workforce in developing countries.7
21. The employment implications of global production systems are varied: they
help generate jobs in certain areas and job losses in others. In low-cost centres,
higher incomes and better working conditions are often realized. At the same time,
the threat of job losses in high-cost centres is real. Highly educated workers in the
technology and service sectors in developed countries have to compete against
college graduates from developing countries. In addition, the emerging global
production systems, by generating relatively well-paying jobs, help mitigate
migration and its attendant social costs in both sending and receiving countries.
22. The trend in outsourcing and use of cross-border production and R&D centres
will probably continue as technological advances drive the speed and lower the cost
of information flows and transportation. Nevertheless, while outsourcing and
offshoring are providing attractive salaries and opening opportunities to many
individuals, the relative magnitude of this type of employment remains relatively
small. In India, for example, offshoring employs 1.2 million workers, a fraction of
its population of over 1 billion people. Thus, the challenge to generate hundreds of
millions of jobs for the world’s poor remains.
23. With increasing globalization, the new production systems require a workforce
that is skilled and more flexible and adaptable to rapid changes in the business
environment. This implies the need for continuous education and training in basic
and specialized fields, including the use of new technologies. The new production
systems have opened opportunities for individuals with highly competitive skills
and education. This is particularly evident in India, where workers in technical
fields such as engineering are earning increasingly competitive salaries as labour
supply shortfalls are being felt.8
24. In developed economies, the demand for skills also continues to grow.
Developed economies have shown a decline in demand for unskilled workers since
the 1970s, which has led to rising unemployment rates of the unskilled and/or an
increasing wage differential between skilled and unskilled workers.9
C. Trends in the workplace
25. Stiff competition under increased globalization and the pressure to maintain
maximum market flexibility in recent years has led to reduced job security and a
reduction in job-related benefits, such as retirement, pensions, health insurance and
unemployment allowance. Increasingly, workers face an increasing share of the cost
of retirement and health insurance. The intense labour competition in manufacturing
and services across countries and growing self-employment has led to a diminished
__________________
7 United Nations Conference on Trade and Development, World Investment Report 2005:
Transnational Corporations and the Internationalization of R&D (United Nations publication,
Sales No. E.05.II.D.10), p. xxiv.
8 Rai Saritha, “India’s outsourcing industry is facing a labor shortage”, The New York Times,
16 February 2006.
9 Ya Ping Yin, “Skilled-unskilled wage/employment disparity: a CGE simulation analysis”, paper
presented to the International Conference on Policy Modeling, Brussels, 4-6 July 2002, p.1.
E/CN.5/2007/2
06-8 61161
role for organized labour, and labour’s relative weakening bargaining position vis-àvis
their employers.
26. The changing occupational and sectoral structure of employment is
accompanied by different work hazards, despite the increase in safety measures in
the redesign of production processes arising from technological advances.
Occupational accidents and injuries and work-related diseases afflict millions of
workers, resulting in 2.2 million deaths every year. About 160 million women and
men fall ill from work-related causes. The International Labour Organization (ILO)
estimates that the total costs of such accidents and ill health are around 4 per cent of
the world’s GDP.10 In the informal economy, lack of regulatory mechanisms fails to
prevent work-related diseases and accidents. As the production process shifts
increasingly from developed to developing countries, weak technical support,
limited training and lack of regulatory oversight lead to greater health and safety
risks for workers.
27. The HIV/AIDS pandemic continues to be a tremendous drain on the labour
force, especially in Africa. HIV/AIDS depletes the labour force, leads to loss of
productivity and stops the inter-generational transfer of skills. It also puts strains on
social support and health systems, in particular in Southern Africa, where some of
the highest rates of infection exist. In addition, as infected individuals migrate to
find job opportunities, the risk of spreading the epidemic increases. In Zambia, the
pandemic is causing severe rural labour shortages, leading to a reverse migration
back to farms.11
28. There is growing awareness of discriminatory practices in the workplace.
Nevertheless, racial and ethnic inequalities continue to prevail, especially in areas
with few anti-discriminatory laws. Millions of persons with disabilities share the
problem of limited job opportunities, although discrimination against persons with
disabilities is gaining recognition. The recently finalized text of the Convention on
the Rights of Persons with Disabilities, which will be submitted to the General
Assembly for adoption at its sixty-first session (see A/AC.265/2006/4, para. 12),
promotes equal rights and opportunities for people with disabilities. More
specifically, Governments are called upon to set an example by employing persons
with disabilities in the public sector, promoting self-employment and encouraging
employers to hire persons with disabilities through affirmative action and
incentives, among other things.
29. Workers in the informal economy do not enjoy the same rights and benefits
that workers in the formal economy do, which greatly increases their vulnerability.
Informal sector workers are generally not covered by labour laws, including safety
and health regulations; they are usually deprived of the right to organize and bargain
collectively and are not eligible for social security benefits, pensions or any other
form of social protection. In addition, their wages are usually much lower than those
in the formal sector.
30. Within agriculture-related employment, trends are equally worrisome. In
developing countries, where much of the labour force still relies on agriculture,
__________________
10 International Labour Office, Report of the Director-General: Changing Patterns in the World of
Work, International Labour Conference, ninety-fifth session (Geneva, 2006), p. 35.
11 “Rural migration”, Biz/ed online resource site, Institute for Learning and Research Technology,
University of Bristol, United Kingdom.
E/CN.5/2007/2
06-61161 9
roughly three quarters of workers remain below the poverty threshold and live in
rural areas, where the work is most often informal, unprotected and unregulated. Of
particular concern is the fact that, in developing countries, women are
disproportionately represented in the informal economies and are especially
vulnerable. The difficult conditions under which people in the informal sector have
to work result in poor health and increased exposure to injuries, malnutrition and
disease, reinforcing poverty and social isolation and increasing social vulnerability.
31. These changes have resulted in the progressive decline of the “standard”
employment relationship in favour of more precarious forms of employment that
typically offer lower wages, poorer working conditions and less social protection
than “standard” employment, such as home-based work, part-time or temporary
work, on-call work or self-employment. The nature of these jobs has significantly
increased employment-related vulnerabilities among workers. Precarious
employment is characterized by limited social benefits and statutory entitlements,
low wages and poor working conditions and should not be confused with employeedriven
flexible working arrangements sometimes found in developed countries. It
comes with no certainty of continuing employment and high risk of job loss, a low
level of regulatory protection and no recognition of trade union rights. Statesupported
social protection systems, to the limited extent that they exist in the
world, have not been modified to accommodate the growth and spread of precarious
employment. Current formal social protection systems are largely designed to
benefit those with uninterrupted years of service in the formal economy, preferably
in the same country and with the same employer, and new systems to accommodate
social changes have not yet been put in place.
32. Finally, besides providing significant opportunities for workers in some
countries, globalization has also played an important role in increasing the
vulnerability of workers. The steep rise in unemployment and poverty that emerged
in the wake of the Asian financial crisis revealed the heightened vulnerability of
developing countries to the volatility and change that can occur in global financial
markets. The dramatic worsening of labour market conditions in even the most
robust developing countries during that crisis raised serious concerns about the
effect of rapid financial market liberalization upon vulnerability among workers and
poor people.
D. The enabling environment for full employment and decent work
33. The goal of full employment and decent work for all rests upon the promotion
of an enabling overall macroeconomic environment based upon the implementation
of an integrated and coherent set of policies at the national and international levels.
Sound macroeconomic policies, accompanied by a balanced national development
agenda, can create the conditions for high economic growth rates and social
development needed to promote full employment, poverty reduction and social
integration. Macroeconomic policy should provide adequate fiscal space for
countercyclical policies to address situations of economic and employment
stagnation and recession.
34. In addition, policies should be adopted that promote an enabling economic
environment, including good governance, appropriate policy and regulatory
frameworks, transparency, appropriate laws for property rights, adequate
E/CN.5/2007/2
06-10 61161
infrastructure and a developed financial sector. Certain institutions are also crucial,
especially effective legal systems, sound political institutions and well-functioning
bureaucracies. Full employment and decent work should be made a central goal in
national economic and social policymaking, and there should be a mechanism to
assess what impact policy decisions will have on employment and decent work. The
participation of civil society, including trade unions and employers’ associations, in
the policy decision process is important.
35. At the international level, the goals of full employment and decent work for all
should be made global objectives and should be pursued through a more balanced
and coordinated strategy. Multilateral and bilateral development cooperation
institutions should ensure that employment issues are given prominence in their
operations. Governments, for their part, should ensure a coherent integration of
economic and social policies, so that employment policies and decent work
programmes are fully integrated into national development and growth strategies
and, where applicable, into poverty reduction strategy papers. The 1998 ILO
Declaration on Fundamental Principles and Rights at Work, which provides a
minimum set of rules for labour in the global economy, should be strengthened in all
countries.
36. There is a need at the international and regional levels to promote more
transparency, coherence, flexibility and policy space for countries so that they can
attract and manage foreign investment in ways that will maximize the benefits. Such
capital inflows can provide for growth, employment creation and poverty reduction.
At the same time, countries should also be provided policy space to minimize the
adverse effects of foreign investment, such as the crowding out of domestic
investment and the possibility of rapid capital outflows, which could trigger
financial crises. Also required are more regional coordination and transparency of
investment incentives so that developing countries are discouraged from competing
among themselves to attract foreign investment and thus avoid the proverbial “race
to the bottom”.
37. While trade liberalization and economic integration can create new
opportunities for countries in the long run, it is also important to take steps to
improve supply capacity and trade-related infrastructure in order to ensure that the
benefits from trade liberalization can lead to employment growth. Often, however,
trade liberalization and economic integration impose structural and labour-market
adjustments that have an adverse impact on employment and decent work.
Therefore, trade policy and trade reform need to be made more employment-friendly
by ensuring that labour markets are prepared at each step of the process of change.
It is clear that selective and temporary safeguards might be necessary to minimize
the negative impact of these adjustments on employment and decent work. However,
the reality is that, in a globalized world, such structural and labour market
adjustments tend to become quasi-permanent features of integrating economies, and
the social protection system should be strengthened, including through reforms of
social security systems. The size and scope of security programmes can be adjusted
according to periods of boom or recession, but a core set of policies should remain
in place over the economic cycle in order for worker security to be maintained and
to allow companies the space to adapt.
38. In particular, social protection can enhance the dynamism of the economy and
the mobility of labour through guaranteed income security that stabilizes the
E/CN.5/2007/2
06-61161 11
economy during periods of recession. However, where social protection is not
available or weak, the provision of risk management mechanisms — such as
savings, credit (both for consumption and emergency needs and for productive
activities), mutual insurance, training and public works, to provide an income at
times of economic slowdown or recession — can improve the level of economic
security of workers during periods of income loss.
39. In developed countries where the labour force has shrunk as a result of
population ageing or a shortage of specialized skills, cross-border movements of
labour can help sustain economic activity and growth. Such movements of labour
can stabilize the labour markets of both labour importing and exporting countries
and policies should be designed to maximize the development benefits of migration.
40. Globalization and trade liberalization are forcing countries to adapt more
quickly to new technologies in order to remain competitive in world markets.
Knowledge and skills development are key to employment strategies because they
determine the employability and competitiveness of the labour force as well as the
investment climate of an economy. In order to respond to rapidly changing skill
requirements, there is need to raise the level of education and training, especially in
developing countries. To enhance the employability of youth, countries should
consider introducing vocational training approaches at the primary, secondary and
tertiary levels. It is important to have policies in place that address the employment
opportunities for young people coming into the labour market, in particular through
targeted measures to overcome the specific disadvantages many young people
encounter in the labour market.
41. For many developing countries, the agricultural sector is still the main
employer, in particular in sub-Saharan Africa and South Asia. Therefore, the
creation of decent employment should be promoted through productivity growth in
on- and off-farm activities. In particular, the development of productive and
remunerative non-farm activities should be promoted as a means to create
employment and to deepen linkages between the agricultural sector and the broader
national economy. Some sources of labour productivity growth, however, especially
capital-intensive technologies, may increase productivity at the cost of employment,
especially in the short and medium term. In agriculture, such displacement of
employment can adversely affect poverty in the short run and Governments should
provide adequate social protection systems until other sectors can absorb the surplus
labour. The focus on rural development, however, should not be at the expense of an
equal focus on the promotion of the structural transformation of the economy to
higher value-added sectors.
42. Deepening and broadening access to financial services by poor people,
especially in rural areas, can reduce their vulnerability and expand their economic
opportunities, in particular their ability to become self-employed, and enable them
to build assets over time. Enhanced access in rural areas, beyond microcredit, to
meet the needs of the agricultural cycle and for investment in productivityenhancing
activities, should be actively promoted. The development of an inclusive
financial sector should be pursued to ensure that safe and flexible savings products,
secure transfer and remittance facilities, and insurance services are available to poor
people, in particular in rural areas.
43. In many developing countries, especially the least developed countries, official
development assistance remains the central means to augment public investment for
E/CN.5/2007/2
06-12 61161
human resource development in rural areas, rural infrastructure and agricultural
research, which normally do not attract private sector investment. Agricultural trade
distortions can have negative effects on local producers in the agricultural sector in
developing countries. International cooperation should address the issues of
agricultural trade, market access, reduction of trade barriers and fluctuations in
commodity prices and terms of trade for agricultural commodities, bearing in mind
the implications of policies in those areas for employment and poverty reduction.
44. Employment deficits in urban areas require attention to promoting sustainable
industrial and service sector development, information and communications
technology and tourism. Industrialization in developing countries can generate
growth, productivity and income gains and generate sustainable employment.
Industrial policies should reflect areas of potential comparative advantage and
provide an enabling environment in terms of infrastructure and support services to
raise productivity and facilitate access to new markets. The development of
backward and forward production linkages will benefit the development of small
and medium enterprises (SMEs) and spur employment generation.
45. Women are typically overrepresented in the informal economy and suffer from
pervasive discrimination in labour markets that, among other things, burden them
with lower wages than men and occupational segregation. There is a need to
promote and support self-employment and the development of small enterprises by
women through improved access to finance, technology and training. The effective
participation of women working in the informal economy in the policy process will
better address their needs and concerns, especially their need to balance productive
work against household and family responsibilities. Serious consideration must be
given to developing the institutional capacities necessary to gradually formalize the
large informal economy in many developing countries, in particular in Africa, in
order to extend the outreach of social protection and other benefits of decent work
to all.
46. In most developing countries, the SME sector can be considered the
springboard to a strong industrial sector, yet the sector is characterized by poor
market access, scarcity of intermediate suppliers and fierce domestic competition. In
order to bridge the productivity differences with large firms, policies are needed to
make the SME sector more productive and to overcome decent work deficits in
terms of remuneration, security against income loss, social protection, rights at work
and social dialogue. The skills of workers and entrepreneurs need to be upgraded
and business practices should be modernized. The provision of business
development services can increase the chances of survival of SMEs and make them
more competitive.
E. Labour market interventions for full employment and decent work
47. As seen above, globalization and other related processes have greatly affected
the employment situation over the last decade. They have given rise to increased
labour mobility and have brought new employment opportunities. However, they
have also created new uncertainties. Many countries have adopted policies to
address the employment impact of globalization and technological change in the
short and medium terms, through labour market policies, and also in the long term,
by enhancing education and training.
E/CN.5/2007/2
06-61161 13
1. Labour market policies
48. Labour market policies are a key instrument for Governments to promote the
goal of full employment. Passive labour market policies consist mainly of income
replacement measures during periods of joblessness or job search, such as
unemployment insurance. Active labour market policies (ALMPs), by contrast,
stimulate labour market integration through demand- or supply-side instruments.
They promote employment directly through job creation measures such as
employment subsidies, public works and self-employment assistance and indirectly
by improving employability through training and by providing better labour market
information and enhanced job matching (i.e. public employment services).12
49. ALMPs can be found in most countries, albeit with significant differences in
dimension, design and implementation. In the European Union, ALMPs have
become an increasingly important policy tool to tackle rising unemployment rates,
as illustrated by the European Employment Strategy of 1997. During the transition
from planned to market economies in the countries of the former Eastern bloc,
ALMPs were implemented to facilitate labour force adjustment. Developing
countries are also increasingly using ALMPs to alleviate adverse labour market
effects of economic crises. In East Asia, for example, ALMPs were widely used as a
reaction to the economic crisis of the late 1990s. In Africa, the use of ALMPs
remains limited. (Although ALMPs are increasingly being used in developing
countries and countries with economies in transition, the number of evaluations of
such programmes is extremely limited. The scarce evidence on the effectiveness of
ALMPs in those environments should therefore be interpreted with caution.)
50. In addition to the increased use of labour market policies in less industrialized
settings, a trend towards “activation” of those policies has emerged over the past
years, with Governments putting more emphasis on active, as opposed to passive,
policies. In European countries in particular, this shift has taken place in the context
of an emphasis on so-called “flexicurity” or “protected mobility”, in which ALMPs
are seen as an important measure to enhance the structural adjustment capacity of
labour markets by promoting labour mobility through increased security. It also
results from the perception that it is better to finance employment, rather than
unemployment, and the criticism that pure income replacement policies may provide
disincentives to work. Finally, the shift from passive to more active policies also
reduces the financial burden on social welfare systems. By defining the duties of the
unemployed, activation introduces an element of conditionality into labour market
policies. However, it also provides incentives for their integration into the labour
market and spells out their rights, such as the right to a job or a training slot that has
to be provided for. In industrialized countries, the increased activation of labour
market policies has been accompanied by an increased emphasis on job search
assistance, more integrated services and a growing reliance on private delivery of
__________________
12 Gordon Betcherman, Karin Olivas and Amit Dar, Impacts of Active Labor Market Programs:
New Evidence from Evaluations with Particular Attention to Developing and Transition
Countries, Social Protection Discussion Paper series No. 0402 (Washington, D.C., World Bank,
2004).
E/CN.5/2007/2
06-14 61161
services. “Profiling” techniques have increasingly been used to identify those in
need of employment services or retraining.13
51. Research on ALMPs suggests mixed results: whereas some measures have
been very effective in some countries, they have performed poorly in others.
Preliminary findings suggest that the effectiveness of ALMPs in integrating people
into the labour market differs, depending on the type of measure used and a
country’s level of development. In addition to depending on a country’s stage of
development, the choice and effectiveness of ALMPs may also be influenced by the
economic cycle. For example, at the beginning of an economic recession, public
works programmes may be useful in the absence of unemployment insurance to
provide jobs and incomes to displaced workers. Intensive placement services will
also help avoid long-term unemployment. During recovery, private firms can be
encouraged to hire workers through employment subsidies. At all times, training
programmes provide skills to workers and are particularly important for more
disadvantaged workers.
52. Public employment services include counselling, testing and assessment,
placement assistance, job matching and other brokerage services designed to prepare
job-seekers for employment and to improve information on job opportunities. In
countries with unemployment benefits, public employment services can also include
the administration of benefits. In developed countries and countries with economies
in transition, such services tend to have positive impacts on employment and
earnings and are relatively cost-effective compared with other ALMPs. In
developing countries, however, the few available evaluations suggest that their
impact is less positive, owing perhaps to the fact that many labour transactions are
informal and that workers thus prefer other channels of job search.
53. Employment subsidies are intended to encourage employers to hire new
workers, frequently from disadvantaged groups such as the long-term unemployed
or older workers, or to keep employees who might otherwise be laid off. They help
workers avoid disconnection from the labour market and to develop work-related
skills. Employment subsidies are also increasingly used to facilitate the school-towork
transition of youth and to encourage low-skilled workers to take poorly paid
jobs. In addition to changing the structure of demand in favour of disadvantaged
groups, they are sometimes also used to ease structural change from declining
sectors to growing ones by promoting the re-employment of displaced workers.
54. Employment subsidies are frequently found in OECD countries, but are less
common in other regions, mainly because of the high costs involved. Short-term
subsidies are more common than long-term subsidies (such as earned income tax
credit), which provide incentives to take up low-paid jobs. Despite some recent
positive evaluations of subsidy programmes, the overall picture remains
unfavourable in terms of their effect on labour market integration. The main
problem associated with subsidies is that they can have substitution and deadweight
effects,14 workers may be laid off once the subsidy expires and take-up by smaller
firms in particular is low because of administrative barriers or a general
__________________
13 Peter Auer, Ümit Efendioğlu and Janine Leschke, Active Labour Market Policies around the
World: Coping with the Consequences of Globalization (Geneva, International Labour Office,
2005).
14 That is, a subsidized worker is hired instead of an unsubsidized worker who otherwise would
have been hired or the subsidized worker would also have been hired without the subsidy.
E/CN.5/2007/2
06-61161 15
unawareness of the programmes. Finally, long-term subsidies might provide a
disincentive to further skills development.
55. Public works programmes tend to be targeted to the long-term unemployed and
other hard-to-place groups. They are frequently used strategically during economic
downturns or in post-disaster or post-conflict settings. In OECD countries, direct job
creation programmes were used extensively up to the 1980s. Because of negative
evaluation results, they have lost popularity since then. In developing countries, by
contrast, public works tend to play a greater role, in particular as part of poverty
alleviation programmes.
56. Despite the relatively high costs involved, public work schemes are generally
found to be ineffective in achieving labour market reintegration and in increasing
earnings. Given the low-skilled type of work of most public works programmes and
the stigma frequently attached to them, there is a risk of trapping participants in
secondary labour markets. Nevertheless, although public works are not very
effective as ALMP measures, they do fulfil many important developmental
functions. They represent a safety net for the poorest,15 in particular in the absence
of unemployment insurance. By producing public goods and services essential for
regional development, public works can have significant multiplier effects. Public
works can also play a crucial role in post-crisis recovery by providing income,
stimulating local demand capacity and rebuilding destroyed infrastructure.
57. Self-employment assistance involves measures to support the take-up or
extension of entrepreneurial activities by the unemployed, such as providing
financial support or technical and managerial advice. Many Governments are also
beginning to promote self-employment by easing administrative procedures to start
a business and facilitating the registration of informal enterprises. Self-employment
measures not only have a direct employment effect, but can also have an indirect
one if jobs are created in newly founded firms. Countries are turning increasingly to
self-employment support as a means of addressing youth unemployment.
Programmes to promote self-employment play a larger role as a policy tool in
developing countries than in OECD countries or those with economies in transition.
In the case of the latter, this may be related to the historical lack of entrepreneurial
activities. In Asia, in particular, self-employment programmes have existed for a
long time as an element of industrial policy.
58. Most evaluations of self-employment programmes tend to focus on business
development. The labour market effects of such programmes can therefore not be
clearly established. Available evidence suggests, however, that in many cases
participants would have opened their own businesses even without assistance.
Evidence from OECD countries and countries with economies in transition suggests
that self-employment assistance is particularly suited for a specific category of
unemployed, namely relatively well-educated, young males who want to start their
own businesses. In developing countries, by contrast, it seems to be of importance
for a broad range of unemployed persons. Programmes offering mentoring and
business counselling in addition to financial aid seem to be more successful than
those simply providing funding. Since entrepreneurship is not a solution for
everyone and most unemployed would prefer regular employment opportunities,
__________________
15 The low wages and limited duration of public works jobs are intended to ensure that only the
poor without alternatives for income generation participate.
E/CN.5/2007/2
06-16 61161
self-employment support should always be only one option in an array of ALMPs
available to the unemployed.
59. Available impact assessments of ALMPs point to several good practices.
Successful policies and programmes must include comprehensive service packages
and be carefully targeted. (However, a trade-off between targeting and outreach
exists.) A balance between supply- and demand-side measures should exist. ALMPs
must be carefully adapted to the labour market problems of the country in question
and involve the private sector. (Governments should continue to establish overall
priorities, ensure quality and provide funding, especially to address equity
concerns.) ALMPs should function as a bridge to employment rather than as a trap,
as some labour market policies did in the past. In order not to prolong
unemployment unnecessarily, ALMP measures need to reserve sufficient time for
job-search activities. Decentralization of programme administration has also been
found to lead to better results than centralized programmes. However,
decentralization should be accompanied by carefully set performance targets to
prevent the exclusion of groups that are more difficult to target and should not come
at the expense of integrated employment services, for example, through one-stop
shops. Finally, ALMPs should not be ad hoc measures to deal with specific
unemployment problems, but should evolve towards a more permanent policy
instrument that makes possible labour market flexibility within a framework of
security.
60. Although well-designed ALMPs can help integrate the unemployed and
underemployed into the workforce, they must be complemented by other macro- and
microeconomic measures aimed at achieving the goal of full employment. One of
the main reasons why ALMPs may be ineffective in some countries is that a balance
between labour supply and demand does not exist. A favourable macroeconomic
environment that attracts investment and creates and supports labour demand is
therefore essential.
61. Finally, although it is important to provide jobs or training to the unemployed
or underemployed, it is also crucial to retain social protection without work
conditionalities for people unable to benefit from ALMPs, in particular older
persons, persons with disabilities and single mothers with household and family
obligations. In addition, policies must be developed to reach the large number of
workers in the informal economy of developing countries who do not benefit from
labour market policies.
2. Education and training
62. In many countries emphasis has been placed on promoting access to basic
education and vocational training and to improving the quality of education.
Increasingly, attention has been paid to informal and on-the-job training, life-long
learning and distance and electronic (e-) learning. In many countries, focus has been
placed on youth entrepreneurship training, the development of vocational training
and career guidance services and acquisition of information and communications
technology skills. In some countries, skills training has been increasingly set up to
keep older workers in the labour market and to counteract the intensifying financial
pressure on social security systems.
63. Training programmes have also been used to promote the integration of
disadvantaged groups into the labour market. Targeted skills development
E/CN.5/2007/2
06-61161 17
programmes help women and girls gain access to traditionally male-dominated
occupations. They also help persons with disabilities develop the skills they need to
find employment and have been extensively used to promote youth employment.
64. Integrated programmes, which combine training with work experience, have
also been developed. To ensure that training content corresponds to labour market
demand, some countries have made efforts to promote closer cooperation between
training institutions and the private sector. Measures have been taken to ensure that
trainings are certified or lead to formal qualifications to enhance the “portability” of
skills.
II. Full employment, decent work and their impact on
poverty eradication
A. Growth, employment and poverty alleviation
65. At the global level, the proportion of poor people living on less than one dollar
a day in developing countries declined from 27.9 to 21.3 per cent between 1990 and
2001 — a transition of roughly 118 million persons out of extreme poverty.
However, this global average hides important disparities at the regional level.
Global poverty reduction has been driven by the success of East Asia and the Pacific
and South Asia, notably China, where the number of extremely poor people fell
from 377 million to 212 million between 1990 and 2001. All other regions have
experienced setbacks since 1990. In sub-Saharan Africa, although the poverty rate
declined marginally, the number of people living in extreme poverty increased by
140 million.
66. Rapid economic growth can potentially bring a high rate of expansion of
productive and remunerative employment, which can lead to a reduction in poverty.
However, the contribution of the growth process to poverty reduction does not
depend only on the rate of economic growth, but also on the output elasticity of
demand for labour and on the ability of the poor to respond to the increasing
demand for labour in the more productive categories of employment. There is
mounting evidence that the impact of growth on poverty reduction is significantly
lower when inequality is on the rise than when inequality is declining.16
67. It has been argued that the growth-employment-poverty nexus is related to the
openness of an economy and that trade liberalization can lead to the sustained rapid
growth needed to reduce poverty. However, trade liberalization in the absence of
other policies does not necessarily lead to higher growth and may even decrease
welfare in the short run. This can happen when developing countries lack the
financial, human and institutional resources to compete effectively in global markets
and take full advantage of the opportunities provided through international trade. In
addition, many developing countries that suffer from lack of access to markets or
overdependence on the export of primary products are unable to realize the potential
contribution of trade to growth and poverty reduction. In general, the impact of
trade openness on employment outcomes for the world’s poor is mixed and seems to
__________________
16 Martin Ravallion, “Growth, inequality and poverty: looking beyond averages”, Growth,
Inequality and Poverty: Prospects for Pro-poor Economic Development, Anthony Shorrocks and
Rolph van der Hoeven, eds. (Oxford, Oxford University Press, 2004), chap. 3, table 3.1, p. 69.
E/CN.5/2007/2
06-18 61161
be related to differences in the national processes of integrating into the global
economy.
68. At the national level, economic growth may not improve poverty if inequality
in the distribution of opportunities and of outcomes favour the non-poor. Also,
where trade liberalization benefits skilled workers, rather than unskilled workers,
the opportunities offered by the forces of globalization do not reach the poor, who
are largely unskilled. This poverty trap may be reinforced if the distribution of
productive resources is such that it limits access by poor and unskilled people. In
such a case, the benefits of growth would continue to elude poor people and lead to
the perpetuation of the working poor.
B. Interventions to reduce poverty through employment
1. Employment in poverty reduction strategies
69. In many developing countries, poverty reduction strategy papers (PRSPs) now
serve as national road maps for reaching the long-term Millennium Development
Goals. Given the importance of employment for poverty reduction, the expectation
is that employment generation would occupy a central place in those poverty
reduction strategies. However, very few PRSPs appear to include an analysis of
labour markets, employment issues or social security and social protection policies.
From a recent analysis of those strategies in Africa, it seems that only a few
countries with a full PRSP have macroeconomic policy directly and explicitly linked
to employment generation, while only a few PRSPs attempt to quantify the expected
impacts of policies on employment.17
70. The treatment and coverage of employment issues in PRSPs, both in terms of
the quantity and quality of conditions of work, is currently weak. Despite the fact
that income from work is the most important means of survival for the poorest, such
limited treatment of employment creation within the PRSPs is a source of some
concern. In part, this probably reflects the lack of inputs from labour ministries and
the social partners in the consultation processes for the preparation of the strategies.
It may also reflect inadequate attention to the gender dimensions of poverty, since
nearly two thirds of those working for less than a dollar a day are women
subsistence farmers. The fundamental question of how to raise the productivity of
the working poor and the returns they get from their labour should become more
central in the PRSPs.
71. PRSPs that contain employment strategies are often related to agricultural and
rural development and include using labour-intensive agricultural technologies;
developing SMEs and promoting microprojects in rural areas; electrifying rural
areas; and developing rural off-farm activities. In addition to the emphasis on the
creation of employment in rural areas, many current PRSPs promote selfemployment,
non-farm employment in rural areas, targeted employment
interventions, microfinance and credit as means for employment generation, skill
__________________
17 Economic Commission for Africa, Economic Report on Africa 2005..., op. cit. As of October
2004, 21 African countries had full PRSPs and 9 had interim PRSPs. ECA’s analysis of their
employment content indicates that 7 had low employment content, 13 medium-low employment,
while only one country, the United Republic of Tanzania, had a medium-high employment
content.
E/CN.5/2007/2
06-61161 19
formation and training.18 When PRSPs address the quantity of employment, the
qualitative dimensions of decent work, including equity, security, dignity and
freedom, are often absent or minimal. Progress reports required by poverty
reduction strategies rarely mention decent work objectives, policies and
programmes. Similarly, reviews of the PRSPs themselves19 do not comment on
employment programmes, social protection or rights at work. Neither do they offer
in-depth analysis of the effects of programmes and policies.
72. Attributing poverty outcomes to specific employment interventions is
especially difficult because of a limited number of reliable employment indicators in
PRSPs. Such indicators do include, inter alia, the number of unemployed, the
availability of skills training, the urban employment rate, number of jobs created
and labour law flexibility, but decent work indicators do not receive much attention.
Indicators on poverty are often missing as well. Consequently, many progress
reports are not able to clearly demonstrate social advancement in recent years. In a
recent review of poverty reduction strategies, it was pointed out that it would not be
possible to attribute specific poverty reduction results to the poverty reduction
strategy approach because it is not a project or particular policy measure where one
can establish direct causality to poverty outcomes. Rather, it is argued that the PRSP
consists of principles and actions to influence the environment in which policy is
devised, monitored and implemented.20
73. Despite these shortcomings, employment and social protection are beginning
to receive more attention in PRSPs in the majority of countries. Nevertheless, there
are still few PRSPs that fully integrate employment into macroeconomic and
sectoral development policies relating to tax, public expenditure, social services,
agriculture, industrial development, trade or investment. To be more effective,
PRSPs should integrate employment into growth and poverty reduction strategies
and they should aim to develop comprehensive social protection policies and
programmes. It is also important to have an integrated strategy for increasing
incomes and productive employment in the informal economy, including
labour-intensive infrastructural development, enterprise development and creation
of equal employment and income-earning opportunities for women.
2. Promotion of self-employment and entrepreneurship
74. Although the public sector is a major source of employment, the evidence
indicates that the most significant source of new employment lies in
entrepreneurship and SMEs in the private sector, including cooperatives. Enterprise
creation and business innovation can successfully address limited availability of
formal jobs in developing countries.21
__________________
18 Rasheda Selim, “Poverty reduction strategy papers (PRSPs): a review of economic policies,
rural and agricultural development strategies and employment policies in PRSPs” (New York,
December 2004).
19 Joint Staff Assessment reports (now replaced by Staff Advisory Notes) by the World Bank and
the International Monetary Fund.
20 World Bank and International Monetary Fund, “Synthesis: 2005 review of the poverty reduction
strategy approach; balancing accountabilities and scaling up results” (Washington, D.C.,
September 2005), para. 3.
21 International Labour Office, Review of the core elements of the Global Employment Agenda
(GB.286/ESP/1(Rev.), para. 29.
E/CN.5/2007/2
06-20 61161
75. SMEs are important for economic growth, creating employment and
contributing to social cohesion. In developed countries, a large percentage of GDP is
generated from the activities of SMEs. In the United States, 60 per cent of GDP
derives from the activities of SMEs. In OECD countries, SMEs account for over
95 per cent of enterprises and 60 to 70 per cent of employment. A thriving SME
sector is essential for innovation and growth. Entrepreneurship is key to economic
performance, increasing productivity and competitiveness, especially with respect to
innovative change. SMEs and entrepreneurship not only generate growth, but are
important agents for improving worker skills and alleviating pockets of poverty,
especially in inner cities or declining regions.
76. Critics argue that there is not sufficient evidence that SMEs are better at job
creation than larger firms and that subsidizing of SMEs distorts “optimal” firm size
and thus undermines economies of scale. Informally operating enterprises tend not
to offer decent pay, income security or social protection. Some argue that the
emphasis should shift to SMEs and larger enterprises that are employment-intensive
and skill-enhancing. They could be supported by a better regulatory framework and
better access to credit.
77. Self-employment and microenterprises may not be suitable for pro-poor
employment strategies since they may raise incomes, but remunerative and secure
employment cannot be sustained by such interventions alone. There are different
opinions on the role of the informal economy, with some advocating that it should
be gradually more formalized and covered by labour laws and others pointing out
that decent work is attainable in the informal sector with security safeguards.
3. Contribution of cooperatives and small-scale infrastructure
78. The concept of decent work and the notion that there should be economic
growth with social equity resonate well with the cooperative model of economic and
social organization. It has been argued that cooperatives are well placed to mobilize
social capital and can therefore bridge the economic and the social spheres by
providing employment, an equitable distribution of profits and, above all, social
justice. Typically, cooperatives place more emphasis on job security for
employee-members and employees’ family members, pay competitive wages,
promote additional income through profit-sharing, distribution of dividends and
other benefits, and support community facilities such as health clinics and schools,
than do private sector businesses.22 They also address issues of concern such as the
environment and food security. The cooperative model, therefore, offers an
important employment creation opportunity in the face of the global unemployment
and underemployment problem.
79. Cooperatives, through their self-help enterprises, play an important role in
promoting livelihoods and job creation in the fight against poverty. Several forms
and types of cooperatives have the potential to facilitate job creation and
employment generation in various sectors and segments of society. Currently, it is
estimated that the global cooperative movement directly provides productive selfemployment
for several hundred million worker-owners of production and services
cooperatives, as well as the non-member employees of these and other cooperative
__________________
22 John Logue and Jacquelyn Yates, “Productivity in cooperatives and worker-owned enterprises:
ownership and participation make a difference” (Geneva, International Labour Office, 2005).
E/CN.5/2007/2
06-61161 21
enterprises. Cooperatives are also major sources of employment in large-scale
enterprises providing food stuffs, services to consumers and financial services.
Financial cooperatives provide people with secure institutions for the deposit of
savings, which also encourage the formation of new enterprises and thus create new
jobs. In Europe alone, cooperatives provide employment to more than 5 million
individuals.
80. Given an increasingly globalizing world, cooperatives, in particular those in
the agricultural sector, can play a significant role, in both developed and developing
countries. Agricultural cooperatives create employment in areas such as production,
marketing, credit, insurance and transportation. Cooperatives also provide more
quality job opportunities for youth, women, indigenous peoples, persons with
disabilities and other marginalized groups. The ability of cooperatives to integrate
women and youth into the workforce is particularly important, as these groups face
discrimination and poor opportunities for employment. Early anecdotal evidence,
now increasingly supported by hard data, attests to the fact that appropriately
designed cooperative enterprises and microfinance schemes are particularly helpful
for women: not only do the women benefit greatly from the added security afforded
by such group efforts, but this form of social organization promotes the retention of
economic gains accruing from their own initiative and innovation.
81. In view of the employment generation capacity of cooperatives, it becomes
compelling for policymakers at the local, national and international levels to
consider ways and means of mainstreaming the contribution of cooperatives to
meeting the employment challenge facing the world today. In this regard, an
important consideration is how the employment creation impact of cooperatives can
be scaled up in order to massively generate new employment opportunities in those
areas where public and private sector initiatives are weak or absent.
4. Promotion of access to resources, including microfinance and microcredit
82. While most countries have had long experience with informal
community-based financial systems, microfinance — the provision of financial
services to low-income groups — is a recent trend. In general, poor people have
been denied adequate access to credit for a variety of reasons, notably, lack of
collateral, the perception that poor people are bad credit risks and the typically
higher unit transaction costs for small loans. This conventional wisdom was
challenged with the introduction, during the 1970s, of successful microcredit
experiments in Latin America and South Asia. It is timely that “for their efforts for
economic and social development from below”,23 the 2006 Nobel Peace Prize was
awarded to the Grameen Bank of Bangladesh and its founder, Muhammad Yunus.
83. The promotion of access to financial resources, in particular among poor
women, has had an important impact on poverty eradication in many developing
countries. In particular, the promotion of microfinance is now considered an
effective strategy for poverty reduction, employment promotion and income
generation. It helps the poor to increase their incomes and to build up their assets
over time. It can help increase agricultural productivity and the productivity of the
self-employed in the informal sector and thus contribute to transferring the benefits
of growth more rapidly and equitably through the informal sector. In addition,
__________________
23 Nobel Peace Prize communication, 26 October 2006 (see www.nobelprize.org).
E/CN.5/2007/2
06-22 61161
access to financial services, such as loans, savings and insurance, can provide poor
people with a vital cushion in times of economic shock and natural disasters, as well
as during sudden emergencies or periods of unemployment or crisis such as that
created by a death in the family. Microfinance can also improve the household’s risk
management capacity through the enhancement of social capital, derived in part
from training and capacity-building efforts. In general, it appears that clients who
participate in microfinance programmes on a continuing basis eventually realize
better economic outcomes than non-clients.
84. Microfinance has been most successful in South Asia, where it has mobilized
voluntary savings, set off a process towards the expansion of services available in
rural financial markets, and strengthened the social and human capital of the poor,
especially women. Nevertheless, it has been argued that microcredit rarely reaches
the poorest of the poor, who would benefit more from savings and insurance
products, rather than from credit. Moreover, since the poorest are hard to reach,
many microfinance institutions prefer to focus on their overall performance, rather
than on the reduction of poverty.
85. There are initiatives that target the poorest by providing them with
income-generating assets and opportunities for self-employment. Started in 2002, an
experimental programme of the Bangladesh Rural Advancement Committee, named
Challenging the Frontiers of Poverty Reduction: Targeting the Ultra Poor, distributes
income-earning assets and provides employment and enterprise development
training and technical support, as well as essential health-care support. The strategy
is to help the very poor build a solid physical and socio-political asset base. The
results from the pilot phase indicate that targeting the ultra-poor has been
successful: a mid-term review reveals that the programme has produced noticeable
gains in social and human capital. The majority of participants in the initiative
escaped their ultra-poor status and improved their standard of living. About
40 per cent are moving towards the standards of households targeted by
microfinance institutions, while 75 per cent have prospects of sustaining their gains
into the future.24
III. Full employment and decent work and their impact on
social integration
A. Social integration and work: the basis for action
86. More than a decade after the World Summit for Social Development, there is
limited progress in assuring that the basic elements of social integration identified in
Copenhagen are enjoyed by all the world’s peoples. Indeed, in many respects, the
world today is less socially integrated than in 1995.
87. Nowhere is the lack of progress with respect to social integration more evident
than in the increasing insecurity in the workplace and the shrinking opportunities for
decent work in global and national labour markets. Access to decent work
opportunities is particularly stymied for population groups that have been
__________________
24 Imran Matin and Yasmin Rabeya, “Managing scaling up challenges of a program for the poorest:
case study of BRAC’s IGVGD program”, Scaling Up Poverty Reduction: Case Studies in
Microfinance (Washington, D.C., World Bank, 2004), pp. 77-94.
E/CN.5/2007/2
06-61161 23
traditionally vulnerable and marginalized in the workplace. These groups are highly
vulnerable to the negative consequences of new labour market trends, such as the
emergence of flexible labour markets, short-term or contractual labour agreements,
and the consequent increase in employee insecurity. While overall global
employment rates remain unchanged or appear to have improved over the past
decade, an increasing share of the labour force is working under conditions of job
insecurity, instability and various forms of discrimination.
88. All individuals, regardless of age, sex, race, ethnicity or disability, have a right
to employment and decent work in conditions of freedom, equity, security and
human dignity. The right to work is enshrined in the Universal Declaration on
Human Rights, which notes, inter alia, that everyone has the right to work, to free
choice of employment, to just and favourable conditions of work and to protection
against unemployment. Further, everyone, without discrimination, has the right to
equal pay for equal work, and everyone who works has the right to just and
favourable remuneration, ensuring for herself or himself and her or his family an
existence worthy of human dignity and supplemented, if necessary, by other means
of social protection.
89. Besides being a basic human right, employment is an important avenue for
people to become integrated into society. It affords not just income, but also
economic and social integration by providing access to the cash economy, as well as
opportunities for civic and society integration through professional and labour
organizations and socialization with colleagues.
90. A strong foundation for social development can be built when all those who
want to work are given the opportunity to be employed and when all are afforded
equal protection in the workplace. In a society with equal opportunities for all, an
individual’s chances of securing and holding a job and earning equal pay for equal
work would not be tied to ascribed characteristics such as race, sex, age, disability
or economic class. Although social fluidity and tolerance are increasing in many
parts of the world, and there is general condemnation of open discrimination in the
workplace, opportunities to secure employment, to be fairly remunerated for one’s
efforts and to be protected against abuse and discrimination in the workplace remain
persistently linked to ascribed characteristics.
91. Given the central role that employment plays in providing incomes and the
basic livelihood for individuals and families, social exclusion in employment can
have consequences that extend well beyond the workplace. Exclusionary policies in
the workplace compromise social justice and jeopardize prospects for achieving the
Millennium Development Goals. It is thus essential that immediate and concerted
national and international action be directed at ensuring that the changes occurring
in the global labour market work in the interest of greater social integration of all
persons and groups.
B. Interventions to promote social integration through employment
92. Government efforts to promote social integration have emphasized improving
the labour market opportunities for two large demographic groups — women and
youth. There has also been concern about how to foster the social integration of
growing pools of older persons, especially those in developed countries, by
promoting their employment opportunities beyond traditional retirement ages. The
E/CN.5/2007/2
06-24 61161
inclusion of persons with disabilities has also gained considerable impetus in the
recent past, especially in the light of discussions on the Convention on the Rights of
Persons with Disabilities. For some countries and communities, land issues and
geographical isolation are at the core of social exclusion. This is particularly the
case with respect to indigenous peoples whose needs and rights have been
persistently ignored. Governments are beginning to adopt policies and implement
programmes to address the needs of indigenous peoples and to provide them with
education, health and other services to enable them to function more fully within
their communities.
93. An overarching and pressing concern for Governments everywhere has been
how to enable the growing international migrant streams that have accompanied
globalization to become better integrated into their receiving communities and
countries. The social integration of international migrants is critically dependent on
their successful integration into the labour market.
C. Women
94. Women’s earnings are substantially lower than men’s throughout the world.25
Women are also overrepresented in the informal economy where jobs are
lower-paying and less stable and the rights of workers are less protected. Women
and men are segregated in the types of job they do: in virtually all countries, women
are overrepresented in the service sector and men are overrepresented in the
industrial sector. Women’s opportunities to participate in the labour force have
expanded in recent decades; however, the occupations traditionally held by women
pay less than jobs requiring similar skill levels, but occupied predominantly by men.
95. There is significant cross-national variation in the rate of female labour force
participation. One factor that prevents women from working outside the home is
their responsibility for maintaining the household through activities such as meal
preparation and cleaning, as well as caring for children, elderly parents or other
family members. When support with care work is provided, specifically when
childcare is readily available, women have more autonomy to choose whether or not
to work outside the home. Institutional factors, such as government policies and
childcare options, help explain some of the cross-national variation in female labour
force participation. Evidence suggests that where childcare is easily accessible and
compatible with work schedules, more women work outside the home.26 Where
policies support maternity and paternity leave, and are flexible for women returning
to work after childbearing, including the availability of part-time work, more
women work outside the home.
96. The increasing number of women working outside the home poses a dilemma
for social integration. Often, work outside the home is accompanied by less time
spent in traditional roles, such as caring for children and preparing meals.
Conflicting pressures and desires to fulfil domestic roles and pursue work outside
the home creates an internal struggle for many women faced with a trade-off
__________________
25 International Labour Office, Report of the Director-General: Time for Equality at Work; Global
Report under the Follow-up to the ILO Declaration on Fundamental Principles and Rights at
Work, International Labour Conference, ninety-first session (Geneva, 2003).
26 T. van der Lippe and L. van Dijk, “Comparative research on women’s employment”, Annual
Review of Sociology, vol. 28, 2002, pp. 221-241.
E/CN.5/2007/2
06-61161 25
between home and professional life. Both roles are also important for different
aspects of social integration. On one level, socialization of children and family
maintenance are essential activities to ensure that children and families are
integrated. Parental support helps to ensure that children complete their homework
and stay in school. Preparing meals is an essential activity supportive of health and
nutrition, which allows children and employed family members to engage in their
roles as student or worker. Often, women find both roles rewarding and valuable,
but are left with too few hours in the day to fulfil both, especially if circumstances
require working long hours or multiple jobs. As more women throughout the world
work outside the home, they often continue to do traditional work in the home,
creating a “double shift”: a situation where women work full time outside the home,
then come home and provide essentially full-time care for the family as well.
D. Youth
97. ILO estimates that youth represent about half of the 192 million total
unemployed persons, a particularly troublesome figure, given that youth make up
only one fourth of the working-age population. In most areas, youth unemployment
rates are up to three times that of the general population. Between 1995 and 2005,
youth employment rates increased globally from 12.1 to 13.7 per cent. In the same
period, the youth labour force participation rate fell between 1995 and 2005 from
58.9 to 54.1 per cent, explained in part by the increasing proportion of young people
in school. Moreover, youth have an even smaller share of decent and productive jobs
(see E/CN.5/2007/3). Youth often face discrimination in employment.
Discrimination can be particularly severe for young women, ethnic minorities and
young indigenous people or young people with disabilities. In some places,
unemployment is higher for more educated youth.
98. While the number of youth in secondary and tertiary education has increased,
labour markets in many countries are not able to accommodate this large group of
skilled young graduates. This is due in part to a failure in many countries to closely
link the educational system to the needs of the labour market, but is also a result of
the large number of young people now reaching working age. In the absence of
opportunities in the formal labour market, young people are also turning to so-called
forced entrepreneurship and self-employment in the informal sector. They often
work in hazardous conditions for low pay and with few prospects for the future. A
combination of these factors can cause young workers to become disillusioned and
alienated. Young people are also very significant among the 175 million global
migrants, adding to the brain drain. However, there is the potential for “brain gain”,
if they return to their country of origin after acquiring skills abroad.
99. Unemployment among youth has serious consequences for social integration in
terms of peaceful resolution of conflict and conventional political participation.
There has been increasing concern among policymakers that the frustration that
accompanies long-term unemployment among groups of young urban men feeds
political and ideological unrest and violence. It has also been argued that
unemployed and idle youth who have emerged in society as part of a large
demographic bulge may question government authority and endanger its stability.
100. Stability and safety are important aspects of social integration that may be
adversely affected by youth unemployment. Young people who live in difficult
E/CN.5/2007/2
06-26 61161
circumstances are often at risk of delinquency. Delinquency rates have risen
dramatically in the countries with economies in transition: in many cases, juvenile
crimes have risen by more than 30 per cent since 1995. In Africa, delinquency
appears to be linked to hunger, poverty, undernutrition and unemployment. Young
delinquents often suffer social and economic exclusion, creating a cycle of
exclusion and delinquency.
101. Youth unemployment also affects social integration through the impact on
other roles young adults traditionally take. For example, lack of employment
opportunities is likely to affect family formation differently for men and women.
There is also evidence that unemployment among youth has long-term implications
for earning capacity.27
E. Older persons
102. The world is ageing rapidly as people live longer and healthier lives. In 2006,
one out of every nine persons is aged 60 years or older and it is estimated that by
2050 one in five persons will be in this age group. Developed countries have been
concerned with their ageing populations for some time, but ageing is becoming a
concern in developing countries as well. In these regions, the proportion of the
population aged 60 years and over will grow even faster than in developed
countries. This will put tremendous pressure on Governments and communities to
find ways to provide for those unable or unwilling to work, while creating
employment opportunities for those who seek to continue to be in the labour force.
103. In an ageing population the proportion of the population in the working age
groups declines, resulting in higher dependency rates. This situation can put a strain
on pension systems essential to ensuring that the ageing population maintains a
decent standard of living and has its basic needs met. The pension structure and
retirement options also affect the decision of older people as to when to leave paid
work and whether or not to continue to work after retirement. Regardless of whether
older people are employed, they continue to be an important and valuable asset to
society.
104. The number of older persons remaining employed varies considerably around
the world. Countries with high per capita incomes tend to have lower labour force
participation rates among older persons. Older persons in less developed regions
continue to participate, to a great extent, in the labour force, owing largely to the
limited coverage of social security schemes and the relatively low guaranteed
incomes.
105. Unfortunately, older persons face discrimination in employment. Older persons
should have the opportunity to work or to have access to other income-generating
opportunities as well as to determine when and at what pace to withdraw from the
labour force. Continuing educational opportunities and opportunities to update skills
could help to empower older persons to decide for themselves when to leave the
labour force. In order to fully empower older persons to leave the labour force when
they want to, pensions and health care should be available to them so that they are
not forced to work for survival.
__________________
27 Thomas A. Mroz and Timothy H. Savage, “The long-term effects of youth unemployment”,
Journal of Human Resources, vol. 41, No. 2 (2006), pp. 259-293.
E/CN.5/2007/2
06-61161 27
106. Older persons should be valued independently of their economic contribution.
Even when older people leave the labour force, they contribute to society through
volunteer work and caring for children, grandchildren and the sick. Throughout
Africa, older persons have helped to maintain social integration by caring for adult
children who are ill from HIV/AIDS, as well as for grandchildren orphaned by
disease. They also remain integrated in society by sharing their knowledge and
skills with younger generations. Older persons are a valuable source of knowledge
and experience that many societies may not be fully benefiting from. This unpaid
work promotes community and family integration, and could be further supported
by targeting older persons with regular income transfers or pensions.
F. Persons with disabilities
107. Persons with disabilities face particular challenges to social integration. They
are often excluded from participation on the basis of prejudice, discrimination and
fear resulting from a lack of understanding and a lack of legal protection. Over
600 million people worldwide have a physical, sensory, intellectual or mental
impairment of one form or another, the equivalent of approximately 10 per cent of
the world’s population. ILO estimates that 368 million of the world’s working-age
people have a disability, and many who are willing to work are unemployed.
Persons with disabilities are disproportionately unemployed — in some countries, as
many as 80 per cent of persons with disabilities are without work.28 Not only does
this vast disparity contribute to their exclusion from an important social role and
human right, but it is also a waste of human capital around the world.
108. Even when persons with disabilities are employed, they are often
underemployed. They are paid below minimum wage in many instances and engage
in work below their skill levels.29 Many of the persons with disabilities who do find
jobs are employed in the informal economy where labour protection is limited and
work is unstable.
109. One of the reasons for high rates of unemployment and the underemployment
of persons with disabilities is the misperception among employers about the
capacities of persons with disabilities and the cost of accommodating them. This
misperception persists despite evidence that persons with disabilities have high
performance ratings and high retention rates, and that the cost of accommodating
workers with disabilities can be minimal.30 The fact that persons with disabilities
are often excluded from mainstream social life may further fuel such
misperceptions.
110. Additional factors associated with the poor employment chances of persons
with disabilities include a lack of access to training, inaccessible transportation and
lack of supportive legislation and policies.31 Essentially, the lack of integration of
__________________
28 International Labour Office, Report of the Director-General: Time for Equality at Work...,
op. cit.
29 Center for International Rehabilitation, International Disability Rights Monitor: Regional
Report of the Americas 2004 (Chicago, International Disability Network, 2004).
30 D. Morris, “The next great hiring frontier”, Wall Street Journal, 13 September 2005; and
D. D. Unger, “Employers’ attitudes towards persons with disabilities in the workforce: myths or
realities?” Focus on Autism and Other Developmental Disabilities, vol. 17, No. 1, pp. 2-10.
31 Center for International Rehabilitation, International Disability Rights Monitor..., op. cit.
E/CN.5/2007/2
06-28 61161
persons with disabilities into policy, transportation infrastructure and the education
system further contributes to their exclusion from employment. This creates a
vicious circle where lack of integration in one area of life contributes to and
reinforces lack of integration in other areas.
111. Some countries are introducing policies aimed at ensuring equality of
opportunity and at being supportive of social inclusion of persons with
disabilities.32 Such policies are essential to interrupt the cycle of exclusion and
support the integration of persons with disabilities into mainstream employment.
Equal opportunity and other supportive policies and legislation provide an
opportunity to more fully utilize the human capital of 10 per cent of the world’s
population that is currently underutilized. Employment, in turn, opens the door to
other aspects of integration, including family formation, economic independence
and protection from poverty, as well as making a contribution to the national
economy.
G. Indigenous peoples
112. Indigenous peoples, especially women, are among the most vulnerable in any
population. They tend to be both physically and socially excluded, although they are
custodians of cultural heritage and possess considerable artisanal skills whose
protection and transfer are essential to the continuity of their communities.
Indigenous communities also frequently own traditional lands that are at risk of
being encroached upon by Governments or private industry, in the quest for business
opportunities in manufacturing, mining or tourism. The social integration of
indigenous peoples through employment poses a difficult challenge for many
Governments.
113. Efforts to provide opportunities for the full inclusion of indigenous peoples in
the labour market require careful consultation to ensure that they do not violate
indigenous peoples’ rights to their land and other resources. They also require that
policies be crafted in consultation with indigenous leaders so that they promote
integration, and not assimilation. The ILO Convention concerning Indigenous or
Tribal Peoples in Independent Countries requires, among other things, that ratifying
States consult indigenous and tribal peoples through appropriate procedures and in
particular through their representative institutions whenever consideration is being
given to legislative or administrative measures that may affect them directly and
provides that States should establish means for the peoples concerned to develop
their own institutions.33
114. The dearth of employment opportunities for indigenous peoples means that
poverty is pervasive in most indigenous communities. Migration, which is
increasingly becoming a coping mechanism in indigenous populations, increases the
vulnerability of indigenous peoples to exclusion because migrants often lack the
skills required to operate in the formal economy and are often discriminated against
because of racial, cultural or religious affiliation. Indigenous migrants are also
vulnerable to sexual exploitation and trafficking.
__________________
32 International Labour Office, Achieving Equal Employment Opportunities for People with
Disabilities Through Legislation: Guidelines (Geneva, 2004).
33 ILO Convention No. 169 (http://www.ilo.org/ilolex/english/convdisp1.htm), article 6.
E/CN.5/2007/2
06-61161 29
H. International migration
115. A great deal of attention has been given to the positive economic effects of
labour migration in terms of meeting demands for labour and remittance flows to
developing countries. Less attention has been given to the impact of large-scale
migration on social integration. The consequences for social integration can be quite
negative, including separating families for extended periods of time and the high
risk of exploitation and discrimination that migrants face. At the same time,
migrants prove to be extremely resourceful in developing ethnic enclaves and
networks, and self-help communities that facilitate transitions and reduce the risks
of migration. In addition, a recent policy trend has been support of family
reunification. In OECD countries as a whole, migration for family reunification
accounts for the largest share of migrant intake. Family reunification is viewed as
conducive to the social integration of migrants.
116. The economic effects of migration also have an impact on social integration.
Migrant remittances to developing countries run into the billions of dollars and there
is some evidence that they are facilitating social integration by reducing the
incidence of severe poverty as they are often associated with increased household
investment in education, entrepreneurship and health.
117. Although migrants often benefit from the expanded work opportunities and the
often higher remuneration in their destination countries, relative to countries of
origin, conditions of work are frequently difficult: work hours are longer and those
who end up in the informal economy may have few of the legal protections that
formal sector employees often have. International migration has also brought people
of different nationalities, ethnicities, cultures and religious orientations together,
resulting in xenophobia, discrimination and social conflict. Migrants are more likely
to be discriminated against in the workplace because they often lack language,
negotiating and networking skills to enable them to fully capitalize on the
opportunities offered in their destination countries. Migrant workers are also at risk
for trafficking, and often have little recourse or legal protection from traffickers.
The tendency for migrants to be relegated to peripheral, low-skilled and low-paying
work, regardless of their achieved capacities, subjects them and their families to
poverty and social exclusion.
IV. Continuing challenges for achieving full employment and
decent work
118. Although there has been some progress towards achieving the goal of full
employment and decent work, considerable critical challenges still remain. The
goals of full and productive employment and decent work for all, including for
women and young people, should be made a central objective of national and
international policies and national development strategies, including poverty
reduction strategies.
119. A key challenge is the creation of an enabling environment at the
international and national levels that supports full employment and decent work.
The performance of the global economy is fundamental to the creation of
employment and the quality of work, in particular in developing countries, and
policies at the international level should be more supportive of growth,
E/CN.5/2007/2
06-30 61161
enterprise development, poverty reduction and the creation of decent work for
all. Current policies give low priority to goals such as full employment, decent work
and social protection. Globalization has increased the interdependence between
countries in macroeconomic policies and countries have little policy space to
increase employment levels through more expansionary macroeconomic policies on
their own. Better coordination of macroeconomic policy among countries is
needed to attain the global goal of full employment and decent work.
120. Global production systems are now a significant source of employment growth
for those developing countries that have managed to become part of them and in a
growing number of countries offshoring can have a considerable impact on the
labour market. There should be better regulation of these new production
systems to arrest the possibility of a “race to the bottom” in labour standards.
At the same time, for many countries, participation in these systems is an
important way to attract investment and increase technological capacities and
capabilities.
121. An enabling national environment that supports investment, growth and
entrepreneurship is essential to the creation of new job opportunities and the
reduction of poverty. There is need to increase the employment intensity of
growth through measures to remove any policy discrimination against the
agricultural sector as well as programmes to provide small agricultural
producers with the necessary credit, extension services and marketing
assistance to enable them to take advantage of opportunities provided by
growth. Measures to promote a dynamic small enterprise sector are also likely to
raise employment growth and improve the distribution of income. This is due to the
high labour intensity of the sector and the predominance of poorer workers within it.
Policy changes to remove biases against small enterprises, to provide incentives
for subcontracting from small firms and to increase the provision of
information and marketing assistance to small firms can be highly beneficial.
122. Active labour market policies are needed to facilitate smoother
adjustment to changes in the structure of production brought about by trade
liberalization and globalization. Retraining for displaced workers, job search
assistance and other measures to facilitate labour mobility will be important in this
connection. Such programmes are likely to be enhanced by strengthening social
dialogue on economic reform programmes and promoting worker-management
cooperation to address restructuring at the enterprise level. Social dialogue is
essential in order to reach consensus on reforms that improve the functioning of
labour markets while preserving essential protection for workers.
123. Social protection is a basic component of decent work. However, much more
than half the world’s population is still excluded from any type of social security
protection. Improved social security systems are key elements of an integrated
approach to eradicating poverty and improving equity. To be effective, these
systems must provide for universal coverage and solidarity and cover basic
risks in an integrated way — in particular nutrition, health, ageing and
unemployment. Addressing the differential impact of such schemes on women
must be a guiding principle, since women may be beneficiaries, but also bear
the main burden of family and informal care when social security systems are
absent, restructured or downsized.
E/CN.5/2007/2
06-61161 31
124. The increased social orientation of employment and poverty reduction
strategies still does not adequately target marginalized and vulnerable groups in the
labour market. The tendency for policymakers to equate progress in reducing
unemployment or poverty with progress towards social integration is inadequate.
Social integration is not an automatic consequence of full employment unless
specific efforts are also made to address the increasing marginalization that is apt to
arise in the course of employment growth. A number of social, political and
economic forces have militated against improving social integration through
employment and have led to the marginalization of various segments of the labour
force, especially the most vulnerable. The continuing marginalization of indigenous
people as well as ethnic and religious minorities and expanding migration are also
important challenges for social integration. At the same time, ethnic conflict
terrorism, armed conflict, and rising economic inequalities pose additional threats to
the expansion of social integration. It is thus the duty of the global community to
create an enabling environment that will make the objectives of full
employment and decent work attainable for all.