The impact of the economic crisis on the labour market has been devastating. Sherine Nasr reports on the findings of a recent conference addressing labour woes The global financial slowdown has rapidly turned into a vast labour crisis. The 2008-09 economic recession is seen as the worst since the Great Depression of the 1930s. The crisis is most likely to drag on unless swift measures are adopted by governments to mitigate its negative impacts. "Continued employment and labour market distress remain the primary challenge to many regions," said Azita Berar Awad, director of the Employment Policy Department at the International Labour Organisation (ILO) during a two-day roundtable organised by the ILO to discuss means to mitigate the impact of the global economic crisis on Egypt's labour market. Awad added that there have been an estimated 10.2 million job losses in high-income countries between the third quarter of 2008 and the second quarter of 2009. For developing and middle- income countries the figure stands at 10.7 million. "In reality, millions of jobs are still at risk unless growth recovers on a sustainable basis," said Awad, noting that employment recovery to pre- crisis levels will take five to six years. More alarming still is the fact that there had been a global employment deficit even before the present crisis hit. The current crisis, for most people, is best manifested in weak employment opportunities, persistent levels of unemployment, especially among youth, low quality of jobs and a rise in informal and unprotected employment. "Every three out of four new jobs are created in the informal sector," said Awad. Moreover, the latest crisis has intensified the gender disparities, particularly in the Middle East and North Africa (MENA) region. ILO studies have underlined higher unemployment rates among women relative to men: "Young men in particular have been severely hit as male- dominated industries were affected by the crisis while employed women suffered from the decline in export-oriented industries." In an attempt to contain the increase in unemployment, poverty and inequality, the ILO adopted earlier this year a "Global Jobs Pact" specifically designed to guide international policies aimed at stimulating economic recovery, generating jobs, and protecting the rights of workers. In Egypt, the impact of the global crisis on the labour market has intensified during the second quarter of 2009. "Sectors linked to the external market were the most badly hit. These include, tourism, transport, storage and the majority of service-related sectors," said Laila El-Khawaga, professor of economics at Cairo University and member of the Shura Council. Job opportunities during 2008/09 diminished by 13 per cent to approximately 600,000 instead of 750,000 new jobs that were supposed to be created during the year. According to El-Khawaga, "open" unemployment increased to 9.4 per cent in 2008/09, compared to 8.4 per cent in the previous year. Typical to similar scenarios in other developing countries, women are considered the first victims as soon as adverse economic effects occur. Heba Nassar, who also teaches economics, underlined that men in general tend to dominate sectors and occupations with better-paid jobs. "In the sphere of unpaid work, including subsistence production and unpaid family work contributions, female concentration is extremely high," said Nassar, who noted that the majority of women are still employed in the agriculture sector. The latest statistics on the Egyptian labour market have shown that unemployment among women increased to 23.2 per cent this year compared to 18.8 per cent the previous year, while among men it was estimated at 5.2 per cent this year. More alarming facts become evident as experts take a closer look at the informal sector that accommodates no less than 9.14 million people in Egypt, according to 2009 statistics by the World Bank. "Despite the fact that this is a vital sector to the Egyptian economy, working conditions in that sector sharply contradict with the criteria of decent jobs as described by the ILO," said El-Khawaga, who added that this sector is characterised by the absence of social and health protection, poor working conditions, absolute lack of job security and safety measures, underpayment, and disrupted and seasonal employment. "It is important to note that the living conditions of that large segment of society continue to deteriorate as their salaries further drop due to the economic recession," explained El-Khawaga, noting that the increase in inflation rate to 16.2 per cent in 2008/09 compared to 11.7 per cent in the previous year has had the most adverse impact on the families of workers in this sector. Notably, the price of the food -- vital to these families -- has gone up overall by 19.8 per cent this year compared to 16.4 last year, which immediately results in lower purchasing power and poverty. Nevertheless, some see the present crisis as a golden opportunity to refocus the development paradigm. "Economic policies should be reoriented to target job creation and not only inflation control," said Awad, who added that several recent regional initiatives to address unemployment are a good start towards a more sustainable path to development that gives priority to employment and social protection issues.
