IMF Fears ‘Social Explosion’ from World Jobs Crisis

September 15th, 2010

Look at the U.S. Duration of Unemployment chart featured in the piece below:

U.S. Duration of Unemployment (Weeks)

U.S. Duration of Unemployment (Weeks)

Via: Telegraph:

America and Europe face the worst jobs crisis since the 1930s and risk “an explosion of social unrest” unless they tread carefully, the International Monetary Fund has warned.

“The labour market is in dire straits. The Great Recession has left behind a waste land of unemployment,” said Dominique Strauss-Kahn, the IMF’s chief, at an Oslo jobs summit with the International Labour Federation (ILO).

He said a double-dip recession remains unlikely but stressed that the world has not yet escaped a deeper social crisis. He called it a grave error to think the West was safe again after teetering so close to the abyss last year. “We are not safe,” he said.

A joint IMF-ILO report said 30m jobs had been lost since the crisis, three quarters in richer economies. Global unemployment has reached 210m. “The Great Recession has left gaping wounds. High and long-lasting unemployment represents a risk to the stability of existing democracies,” it said.

The study cited evidence that victims of recession in their early twenties suffer lifetime damage and lose faith in public institutions. A new twist is an apparent decline in the “employment intensity of growth” as rebounding output requires fewer extra workers. As such, it may be hard to re-absorb those laid off even if recovery gathers pace. The world must create 45m jobs a year for the next decade just to tread water.

Olivier Blanchard, the IMF’s chief economist, said the percentage of workers laid off for long stints has been rising with each downturn for decades but the figures have surged this time.

“Long-term unemployment is alarmingly high: in the US, half the unemployed have been out of work for over six months, something we have not seen since the Great Depression,” he said.

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2 Responses to “IMF Fears ‘Social Explosion’ from World Jobs Crisis”

  1. Eileen Says:

    This is a very hard topic to address. I am not an economist, and barely passed the hard stuff in graduate school. Turning everything into a graph was not my cup of tea.
    Still, I have comnon sense. When corporations (since before god was born or for examle the US Civil War) seek to find cheap labor from other than the people who live in the country of origin, you will have a Great Depression.
    In my mind, its a built in higgy-ma-jigger.
    For example, here in my hometown of Western Pa, we had a metal ladder company. Great. Not sure how many it employed. But when this company did not have a demand for its ladders – instead of downsizing – or maybe advertising worldwide on the web, it shut its plant down bere in PA and moved the jobs to Mexico. Whether this company is selling more ladders now because it is paying slave wages in Mexico, I don’t know. But I doubt it. How many people want to spend scarce resources on a ladder in these times? When demand for your product is low, think about it, does your move to Mexico increase demand? I doubt it.
    All those costs to move. Probably a write off. But yes when labor was “too expensive” in U.S. history, we developed a slave trade. Remember?
    How do we stop the Powers that Be from always trying to find a cheaper human capital cost? Here in the U.S. we had slavery, the Civil War over that, and now thanks to George Bush I and Bill Clinton we have NAFTA. I don’t know how to form a catchy phrase to capture that U.S. policies are designed to a.) make it cost effective – anywhere on the planet – to make it acceptable to ship U.S. corporation jobs to the cheapest labor force available, and b.) its “okay” to “kill” jobs anywhere in the world to chase a cheap slave market.
    c.) these fools, wherever they are, looking for cheap labor markets all around the world, while ignoring their home base labor market are on drugs. Steroids. Totally missing the point that their profitability doesn’t depend on cheap slave labor. Yuh, make lots of ladders in Mexico. Still No one buying them. Duh?
    For what’s worth. Offshoring is a waste of human resources. There ought to be something- anything that gives these offshorer’s an education on the impacts of what selling jobs to the lowest wage market does to their nation.
    In my mind, they are fools and probably never had any teachings about suppy and demand and ya, well never cared to open their minds to the impact of their actions to the greater good.

    The whole paradigm of corporate domain and control of production has lost all semblance of sensibility.

  2. tochigi Says:

    mean unemployment at 35 weeks?
    not including workforce dropouts?
    omg, that is on the brink of a full-blown depression.
    now, what was mr. realstats williams saying the other day?

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