A perspective on jobs from the G20

On May 18-19, the G20 Ministers of Labor met in Bad Neuenahr, Germany to discuss and adopt their annual Labor and Employment Ministerial Meeting (LEMM) Declaration advocating for "an integrated set of policies that places people and jobs at center stage." In this, the meeting did not shy away from some of the more thorny issues to reach the overarching goal of fostering "inclusive growth and a global economy that works for everyone." It focused on the much-feared future-of-work, the longstanding challenge of more and better employment for women, better integration of recognized migrants and refugees in domestic labor markets, and ensuring decent work in the international supply chains.  

The Group of Twenty (G20) produces 80 percent of Global Domestic Product and accounts for 75 percent of global trade. They also represent two thirds of the world’s population, but less than half of the world’s poor (44 percent), which, without India, reduces to only just over 9 percent. Despite the presence of few guest countries, international institutions, as well as representatives from civil society, such as the L20 (Labor Unions), and Youth (Y20) and Women (W20), the longstanding concern about underrepresentation of low income countries and the poor clearly remains. Their absence manifests itself in the choice, approach and emphasis of the different topics discussed.

Technology and care

Take the Future of Work, where the discussions focused on the substitution of jobs—the robots are taking jobs away—and changes in the employer-worker relationships—the Uberization of western economies. These might, however, not be the primary labor market problem low-income countries face. There, informality still rules and the skills and enabling environment are largely absent to access and benefit from new technologies. Too little, not too much technology is the challenge in developing countries.

Reshoring of jobs may further close the door for labor-intensive export growth that was so instrumental to Asian countries to exit poverty. Following automation in the developed world, such a route may no longer be available to Sub-Saharan Africa, where the world’s young and poor increasingly concentrate. Inequality may rise as a result, between and within countries. Elimination of the (regulatory and infrastructural) bottlenecks to technological diffusion as well as investment in basic and technical skills in low income countries is called for.

Similarly, in increasing female labor force participation and the quality of women’s employment, the second theme of the declaration, the emphasis lies on measures that relate to formal wage employment, such as parental leave, flexible work arrangements, and active labor market programs (counseling, training, wage subsidies, support to entrepreneurship). In a world where the majority of women work, or could work, in the informal sector, other measures need more attention. As emphasized by the L20, a well-functioning care economy (for children and elderly) is especially crucial.

This requires expansion of social services to vulnerable groups and rural areas, using a mix of public-private service delivery models. Subsidization is also needed, to ensure all women can afford the services, with voucher programs especially successful. For example, in Mexico, the Estancias Infantiles program, which covers 90 percent of the childcare cost with vouchers, increased female employment by 5 percent and average earnings by 20 percent among participant women; it also generated approximately 45,000 paid jobs for providers and aids, who are mainly women. Incentives for private investments within specific regions, sub-sectors and value chains conditional on the creation of jobs for women, are further called for. Without simultaneous investment in “demand” side interventions that generate employment, the labor supply side measures are bound to have limited effect.

Sending countries, value chains, and migrants

Finally, in exploring options for better integration of migrants and refugees in domestic labor markets and decent work along the value chain, more attention could go to the perspective and solutions in the sending countries, often the low-income ones. Better preparation of migrant workers (through pre-departure orientation and targeted training) and reduction in migration costs through better oversight of the private recruitment industry can reduce migration costs and facilitate integration.

As the Declaration highlights, violations of decent work and fundamental principles and rights at work cannot be part of competition. Yet putting the full burden of enforcing compliance along the value chain with international firms, may also lead them to avoid job creation in low-income countries, where poverty is highest and the institutional environment to enforce labor laws weakest. Non-judicial grievance mechanisms to address issues of contention around decent work will be equally critical, as is continued exchange of experiences, learning and policy coherence. Both areas are reflected in the Declaration.

G20 Leaders’ communiqué

The topics of the LEMM Declaration are now forwarded for incorporation into the G20 Leaders’ Communiqué, the statement of the Heads of States, who will meet on July 7 and 8 in Hamburg. This will also reflect the findings of the Development Working Group, where the low-income countries’ perspectives will feature more prominently, as well as the findings from other Working Groups, such as the Anti-Corruption Working Group, the Sustainability Working Group, and the Task Force Digital Economy.
  

In anticipation of the G20 Leaders’ Summit, the Jobs and Development Blog will feature a series in the coming weeks on each of these four topics: the future of work, employment for women, integration of migrants in the labor market, and ensuring decent work in supply chains. It starts next week with the Future of Work. The focus will be the B40 perspective -- the Bottom 40 of the population.
 
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