On February 4, 2020, the ILO, represented by Ms. Mito Tsukamoto, Chief of Development and Investment Branch (DEVINVEST), attended the EIB Board Seminar with Civil Society to highlight the importance of decent work and employment quality in the context of all private and public investments.

In the world today, more than 2 billion people are living in fragile and conflict affected situations, and the risks for poverty and inequality remain with pressing issues such as climate change, scarce natural resources, protracted conflict and low levels of human development.
She summarized the ILO’s flagship report World Employment and Social Outlook: Trends 2020 and confirmed that:

1. A lack of inclusiveness and projected lower economic growth would impair the ability of low-income countries to reduce poverty;
2. There are gaps in access to work, and it is estimated that 473 million people worldwide are considered to be “underutilized”;
3. Decent work deficits exist even when people have a job, and these deficits are particularly clear in the informal economy;
4. Substantial inequalities exist in the access to work and the quality of work, based on segmentation of workers according to geographical location (rural-urban), sex, and age.

Despite significant differences in economic structure, 1.2 billion workers in 41 countries across the globe face common challenges and face decent work deficits, according to a joint research between the ILO and Eurofound on “working conditions in a global perspective.”

Decent jobs are not created in a vacuum. Decent jobs require effective macro-level policy and industrial policy, labour market institutions, and social protection. Inclusive public and private investments, for instance in infrastructure through employment-intensive investments, generate public goods and services that promote decent jobs.

Just because a job is not high skilled, it does not mean that working conditions should be poor. In 2010, Jérôme Gautiém and John Schmitt conducted a comparative study of retail jobs in 6 industrialized countries and discovered large differences in pay, working hours, turnover and working conditions between high and low skilled workers. Measuring the quality of working conditions is crucial to have real impact.

Road infrastructure construction and maintenance projects in the transport sector have the potential to generate most jobs per investment, according to a joint study between the ILO and the EIB. The ILO has also assessed the methods and approaches used by 10 selected IFIs to monitor and assess employment impact of investment projects with the view to assist the European Commission (EC) and maximize the employment impact of the External Investment Plan (EIP).

In reference to the discussions around the EU Green Deal from the first session, she reminded that the ILO has supported disaster-affected countries with a long-term vision through local resource-based approaches, creating decent jobs, building economic and environmental resilience of local infrastructure and capacity of local institutions and cooperatives. The ILO’s experience shows that investments in people and in their capacity building with the use of local resources generate long-term economic, social, and environmental benefits. These are due to indirect and induced multiplier effects, in addition to the immediate direct job creation through the investment.

We must look for a long-term sustainable return on investments. Only those sustainable solutions can create decent jobs that address the root causes of economic and social inequalities.

Stressing that sustainable and impactful investment is also about distributing wealth, Ms. Tsukamoto concluded that employment should be central to investments and not just a mere residual of programmes.

For more details, please refer to the PowerPoint presentation.