The Economic Crisis Killed 67 Million Jobs Worldwide

According to a new report by the International Labor Organization, the global jobs gap — the gap between how many jobs there currently are and how many there would have been in the absence of the global financial crisis — has reached 67 million:

As of 2012, the global employment-to-population ratio (EPR) – the share of the working-age population that is employed – stood at 60.3 per cent. The global EPR declined by 1 percentage point between 2007 and 2012 (see Figure 10), reflecting a substantial weakening in economies’ employment-generating capacity. The EPR in 2012 is the lowest observed ratio since at least 1991, the earliest year for which global aggregate estimates are available. Moreover, while there has been a long-term decline in the global EPR, the average annual decline during the global economic crisis was more than three times the average decline over the 16 years between 1991 and 2007 and represented a stark reversal from the moderate increase in the global EPR between 2003 and 2007. On the basis of these EPR figures, the ILO estimates that a global jobs gap of 67 million has emerged as a result of the economic crisis. That is, there were 67 million fewer employed people around the world in 2012 than expected based on pre-crisis trends.

The ILO also found that 197 million people worldwide are unemployed, while “some 39 million people have dropped out of the labour market as job prospects proved unattainable.” And prospects aren’t improving: “the unemployment rate is set to increase again and the number of unemployed worldwide is projected to rise by 5.1 million in 2013, to more than 202 million in 2013 and by another 3 million in 2014.”

The ILO also had unkind words for the austerity efforts underway across Europe, saying the theory that deep spending cuts would reduce debt and spark economic growth “proved self-defeating.” The International Monetary Fund agrees, recently admitting that it severely underestimated the negative effect that austerity would have on European economies. But that hasn’t stopped the budget slashing efforts, and the U.S. seems poised to follow suit, unless Congress acts.