Working out of poverty: Making jobs the objective

Work is the best route out of poverty," ILO Director-General Juan Somavia told this June's International Labour Conference. He renewed the ILO pledge to bring decent work to all parts of the globe.

GENEVA - Nearly 3 billion people in this world live on less than two US dollars a day. In fact, about a billion of those - or some 23 per cent of the developing world's population - have to make do with one dollar a day or even less.

In many parts of our planet, poverty is getting worse:

  • In sub-Saharan Africa during the 1990s, the number of people living in poverty rose by 25 per cent, to nearly 500 million.
  • During the same period, those in poverty in Latin America and the Caribbean increased from 121 million to 132 million, with a quarter of the population still subsisting on two dollars a day or less.
  • In the Middle East and North Africa, the number of people living at or below that line rose from 50 million to nearly 70 million, while in Eastern Europe and Central Asia, it increased threefold to 97 million.
  • More positively, in China and other East Asian countries during the 1990s, the number of people on very low incomes decreased from 1.1 billion to about 900 million.
  • In South Asia, the number of people living in poverty remains more or less stable at about 1.1 billion, although population growth now makes this a smaller share of the population.
Despite some encouraging signs, the overall trend is gloomy. And there are other, very worrying indications that things could get worse (see inset, Pointers to Poverty).

The problems, and the best ways of tackling them, are described by ILO Director-General Juan Somavia in Working out of Poverty, his keynote report to this June's session of the International Labour Conference. ( see note 1)

"We know that work is the best route out of poverty," he said. "But we cannot legislate employment in and poverty out. It is a long and complex process requiring all elements of society to work together. We must harness the unique power of governments, employers and workers - the global community of work represented by the ILO's constituents - to a concerted global drive against poverty."

And around the world, gender inequality intersects with economic deprivation to produce more intensified forms of poverty, on average, for women than men.

"After all, the poor don't cause poverty," Mr. Somavia pointed out. "Poverty results from structural failures and ineffective, outdated economic and social systems. Poverty grows from inadequate political responses, bankrupt policies and insufficient international support. And its continued acceptance expresses a loss of fundamental human values, of international will."

The solution is to aim for what he calls a "decent work dividend". This will stimulate balanced and more sustainable growth for countries, and better lives for people.

"This decent work dividend involves providing more stable incomes and productive employment," he said. "The ILO is doing this with programmes designed to create jobs, ensure basic rights and social protection at work, end discrimination and fight child labour. These also aim to provide access to financial services, skills development and training, healthier and safer work environments and more entrepreneurial opportunities for small businesses.

"This isn't a dividend just for the poor," the Director-General insisted. "It benefits governments and employers as well."

Poverty reduction would certainly be to the wider economic good. As the report points out, "Increasingly intense competition for restricted markets threatens to create ever more frequent cycles of boom and bust that reward predatory or speculative behaviour rather than productive investment. A successful drive to raise the consuming power of the majority of the world's population, particularly those on the lowest incomes, is fundamental to the broadening and deepening of markets."

Similarly, political and social stability is "hard to envision if a large proportion of the world's population is not only currently excluded from the increasingly visible benefits of economic integration but also sees little or no opportunity of ever participating in a system that appears discriminatory and unfair. Increased expenditure on preserving law and order nationally and internationally, without investing in tackling the roots of the tensions caused by social injustice, is not an adequate response to growing security concerns."

"The ILO is committed to helping people work out of poverty," the report emphasizes. First and foremost, this means "removing the barriers of discrimination and accumulated deprivation that trap people in low-productivity and low-paid jobs".

Strong support for this approach came from the 291 employer, worker and government speakers in the conference discussion. Replying, Mr. Somavia said that the next step would be to "mobilize the worldwide network of tripartism." He would ask the ILO regional and area offices to "use the Report and the rich content of the Conference debate to stimulate national discussion within employers' and workers' organizations, and government circles. We often hear that we are living in a knowledge economy and a network society. I cannot conceive of any group of organizations and institutions that know more about the real workings of the global economy than our constituents. Labour ministries, employers and unions are dealing with the social realities in enterprises and workplaces on a daily basis."

In particular, Mr. Somavia identified four "tools" for poverty eradication (see inset, Pointers to Progress).

"The poor need a decisive commitment from us if they are to find a dignified way to work out of poverty," he insisted. "We cannot let them down."

Pointers to poverty

  • Official unemployment - currently some 180 million worldwide and growing - is at its highest ever. But, in fact, over a billion people work without fully utilizing their creativity or maximizing their productive potential.
  • The world's labour force is growing by about 50 million people a yea and 97 per cent of this increase is in developing countries.
  • The links between a vicious cycle of poverty and sex discrimination against the girl child start at the earliest stages of life within families. Throughout life - from birth to old age - sex discrimination contributes to both the feminization of poverty and the perpetuation of poverty from one generation to the next. Working for gender equality is part and parcel of measures to eradicate poverty.
  • Over the next ten years, more than one billion young people will reach working age. In most developing countries, they face the choice of informal work or no work. This spells greater poverty ahead. In Latin America, for instance, income earned by people aged 20 to 24 is just half that earned by adults.
  • Over 115 million school-age children, mainly in low-income countries, were not in school during 1999. One in six children between the ages of 5 and 14 (211 million) was doing some form of work in the year 2000. Of these, 186 million were in types of child labour which the ILO is committed to abolishing.
  • Two-thirds of the developing world's female workforce outside of agriculture are in the informal economy, mostly doing the lowest-paid work, with the figure reaching 84 per cent in sub-Saharan Africa.
  • The "income gap" between the wealthiest and poorest fifths of the world's population is still growing. In 1960, it was 30 to 1. By 1999, it had widened to 74 to 1. Even in the 20 most industrialized countries, over 10 per cent of the population live below a poverty line of less than 50 per cent of median income.

Pointers to progress

ILO Director-General Juan Somavia singled out four "tools" for poverty eradication:

  • Creating jobs: "Poverty elimination is impossible unless the economy generates opportunities for investment, entrepreneurship, job creation and sustainable livelihoods."
  • Guaranteed rights at work: "People in poverty need a voice to obtain recognition of rights and to demand respect. They need representation and participation. They also need good laws that are enforced and work for, not against, their interest. Without rights and empowerment, the poor will not get out of poverty."
  • Basic social protection: "Poor people are unprotected people. The earning power of those living in poverty is suppressed by marginalization and lack of support systems."
  • Promoting dialogue and conflict resolution: "People in poverty understand the need to negotiate and know dialogue is the way to solve problems peacefully."

Note 1 - Working out of Poverty, Report of the Director-General, International Labour Conference, 91st session, International Labour Office, Geneva, 2003. ISBN 92-2-112870-9. Price: 20 Swiss francs.