Vulnerable employment and poverty on the rise

The economic crisis has had a major impact throughout the world on the level of employment as well as its quality. The ILO’s annual report on “Global Employment Trends 2010” says the share of workers in vulnerable employment worldwide may have increased by more than 100 million in 2009, and with it global poverty. ILO Online spoke with Lawrence Jeffrey Johnson who directed the publication of the report.

ILO Online: How do you define ‘vulnerable employment’?

Lawrence Jeff Johnson: We define workers in vulnerable employment as the sum of own-account workers and contributing family workers. They are less likely to have formal work arrangements, and are therefore more likely to lack decent working conditions, adequate social security and ‘voice’ through effective representation by trade unions and similar organizations. Vulnerable employment is often characterized by inadequate earnings, low productivity and difficult conditions of work that undermine workers’ fundamental rights.

ILO Online: Why it is important to look at vulnerable employment as a separate category?

Lawrence Jeff Johnson: While monitoring unemployment provides a good starting point to assess the health of labour markets in developed economies, particularly in developing economies it is essential to consider decent work deficits among the employed. Before the onset of the current economic crisis, there were large deficits reflected in high rates of vulnerable employment and working poverty in most of the developing world.

ILO Online: How did the global economic and social crisis affect vulnerable workers?

Lawrence Jeff Johnson: Before the economic crisis, the share of workers in vulnerable employment was on a downward trend in all regions, decreasing globally by around 4 percentage points between 1998 and 2008. Today, the total number of vulnerable workers worldwide is estimated at between 1.48 and 1.59 billion – around half of the total global workforce. The number of workers in vulnerable employment may have increased by between 41.6 and 109.5 million from 2008 to 2009.

ILO Online: Are there differences between industrialized and developing countries in terms of the impact of the crisis on labour markets?

Lawrence Jeff Johnson: The impact varied across countries, depending on the national economic structure, the level of integration in global markets, and labour market and social protection institutions, among other factors. In developed economies with strong social protection measures, workers who lose their jobs can move into unemployment, generally resulting in an overall decline in total employment. In many developing economies on the other hand, workers who lose their jobs do not have access to social protection schemes. Rather than becoming unemployed, these workers often take up various forms of employment, working on their own accounts, or contributing to family businesses. This, in turn, results in an increase in the number of workers in vulnerable employment.

ILO Online: How does the rise in vulnerable employment relate to poverty?

Lawrence Jeff Johnson: In view of the impact of the economic crisis on vulnerable employment and labour productivity, the number of workers living with their families in poverty is likely to have increased as well. Estimates of the share of workers in extreme poverty suggest that, in the most extreme scenario, up to an additional 7.0 per cent of workers were at risk of falling into poverty between 2008 and 2009. This would translate into an additional 215 million workers, which is an alarming increase and would represent a setback of many years in reducing decent work deficits. At the USD 2 a day poverty line, it is estimated that up to 5.9 per cent of workers (185 million workers) were at risk of falling into poverty between 2008 and 2009.
* * * * * * * * * *

Global Employment Trends, January 2010, International Labour Office, Geneva, 2010. ISBN 978-92-2-123256-8 (print), ISBN 978-92-2-123257-5 (web pdf).