ITUC’s reaction to the World Bank’s report on jobs

Responding to the launch today of the World Bank’s World Development Report 2013, devoted to the theme of “Jobs”, ITUC General Secretary Sharan Burrow welcomed the publication as recognition by the world’s largest development institution that it must focus on employment creation as a priority goal.

Sharan Burrow stated: “The WDR’s proposal that policies need to be re-examined through a ‘jobs lens’ is a big step forward for the World Bank and an acknowledgement that working people have often paid the price of development policies that ignored the employment and distributional impact. I encourage the Bank to draw the appropriate conclusions from the report, and modify its policies and practices accordingly.

Chief among these are to definitively take labour issues out of the Doing Business report, which for years encouraged countries to eliminate all workers’ protection rules, and to review the generous loans the Bank gives to extractive industry projects, which the report shows do very little to create stable and sustainable jobs as compared to other programmes the Bank should support.”

The WDR 2013 contains a thorough examination of economic evidence about the impact of employment protection legislation and finds no support for previous long-held claims of the Bank’s highest-circulation publication, Doing Business, that countries with completely deregulated labour markets have higher job growth than those that require employers to abide by certain rules on wages, hours, non-discrimination and recourse against dismissals.

Burrow took issue with some points of the WDR 2013, starting with the report’s decision to promote a concept of “good jobs” as a substitute for the well-established ILO objective of Decent Work: “The goal of Decent Work, adopted almost a decade-and-a-half ago and backed by many international institutions and governments, sets out clear criteria of what are productive and fulfilling jobs that development strategies should strive to create. The concept of ‘good jobs’ is confusing and in some aspects problematic, since it includes informal economy jobs. I am also perplexed by the decision of the WDR, in its section on what it calls “social insurance”, to ignore the Social Protection Floor objective, even though it has been endorsed by the UN, the G20 G20 The Group of Twenty, or G20, is a forum for international cooperation on the most important aspects of the international economic and financial agenda. It brings together 19 countries and the European Union, which together represent around 90% of global GDP, 80% of global trade and two thirds of the world’s population. , the IMF and other major organisations.”

The WDR 2013 explains how the 2008 economic crisis increased the global employment deficit and added to the number of “working poor” and how the vast majority of unemployed receive no benefits. It provides several useful recommendations for enhancing the employment-intensity of development strategies. However some parts of the report seem to reflect deeply ingrained biases of the World Bank that impair the overall analysis.

For example, despite the WDR’s emphasis of the importance of investments in education, infrastructures and an efficient judicial system in order to create quality jobs, the report refers pejoratively to “bloated” public agencies, at three places, when referring to the public sector:
“Rather than parroting stereotyped comments about public service workers,” said Burrow, “the WDR would have done better to focus on the ‘bloated’ financial sector which brought the world economy to its knees in 2008 and is responsible for the global surge in unemployment that occurred. It is unfortunate that the report did not deal with the need to create a properly regulated financial sector that supports jobs in the real economy instead of being a source of instability and abuse.”

For further information, please contact the ITUC Press Department on: +32 2 224 0204 or +32 476 62 10 18

Photo: John Connel