Creating jobs is one of the most challenging tasks there are. Many challenges have long existed and continue do so: 600 million jobs are needed worldwide, there are 250 million people in the NEET category (mostly women) and 2 billion workers are in the informal economy. There is a significant gender dimension in all of this. COVID-19 adds new challenges. ILO has forecast unemployment at 140 million and a risk of having 340 million job losses in a second pandemic wave. The GDP will surely rebound; however, a job-rich recovery requires economic transformation, otherwise the risk is that there will be growth without jobs, as already experienced in the recent past. It implies a move to high-added-value productions as well as movements of people, especially from rural to urban areas.
The labour demand moves towards new skilled jobs, triggering a transition towards better-remunerated jobs. More productivity is sought in return for higher wages and good jobs. Since the labour markets were already going through a deep transformation in prepandemic times, policies were already focused (or refocused) on strengthening social protection, ramping up investment in human capital, adapting market regulations and upgrading taxation systems. Some challenges will remain, and routine jobs will be replaced by robots. Digital platforms are completely changing the way we do business. Personal presence is not an issue for doing business. Production reshoring may still happen, with companies producing domestically reaping the benefits of new technologies. Demand for high cognitive skills and socio-emotional skills will increase.
These changes are transforming the employment relationship. With the gig economy, traditional full-time employment contracts will still be around, but they will be less common. Freelancers will increase in number. It is important to keep these pre-pandemic trends in mind because they will be more marked in the post-pandemic period (see also topic 8). We expect that some classes of workers will be more exposed, such as young people, women and informal workers. Gaps between the developed and undeveloped worlds will deepen, since fewer jobs can be performed from home, because of the prevalence of lowskilled jobs in labour-intensive sectors, and due to the dominant presence of informal workers, low access to social protection and income support.
High levels of debt can be an issue as well, not only for states but also for households. We are heading towards a “new normal” in which trends from the past are accelerating and this is increasing the urgency of the policy response. Digital transformation will make measures to exclude digital exclusion urgently necessary. An increase in public debts will call for strengthened fiscal resources mobilisation, universal social protection to cover everything, and a rethink of the mechanism for supporting firms and jobs in face of a huge covariate crisis. Economic transformation imposes new rules regarding taxation (this is in fact a transversal issue in all topics), the fight against tax avoidance, especially for immaterial global businesses, with more progressivity and less tax on labour and more on other tax bases such as those of digital platforms or companies (tax avoidance was also raised in topic 1, 3 and 6, and excessive tax on labour is also in topic 6 and 1).
Workers must be helped to adapt to a changing labour market. There is momentum for change because the shock concerns both supply and demand. Social protection floors are envisaged in the SDGs and they imply a set of services that can be used even if you cannot buy them (see also topic 4). The best social protection is a good, formal job. Creating high-quality jobs must be the ultimate goal of the Recovery Plan. Transitions will be ensured by enabling workers’ adaptability, equipping them with the right skills and ensuring activation measures and adequate protections to maintain their jobs or protect their income.
Pursuing a job-rich recovery means that the Recovery Plan must drive public investments that change our development model while introducing new rules and protections for workers with two aims: i) a generalised improvement of wages and working conditions and ii) universal social protection systems in which nobody is excluded because of his or her position in the labour market or society (minimum income). Better jobs come also from investments in high-productivity sectors, distributing wealth across society better and investing more in people, especially training of adults and in digital skills. In a situation of high debt for state and households, taxation must be shifted away from labour to digital platforms and companies.
Lead Economist, Social Protection and Jobs- Co-director WDR
Federica is Director of the World Development Report 2019. Prior to this position, she was a Manager in the Development Economics Global Indicators Group. In that role, she was responsible for developing global programs with a focus on policies and regulations across a number of thematic areas, including agriculture and agribusiness, skills, information and communication technology, public procurement and PPPs. Under her intellectual leadership, nine World Bank global reports have been published since 2014, including the Enabling the Business of Agriculture (2015, 2016, and 2017), Benchmarking Public procurement (2015, 2016, and 2017) and Procuring Infrastructure PPPs (2015, 2017, and 2018). She has published in peer-reviewed journals, including studies on firm productivity, global value chains, and the impact of regulation on growth and competition. She has also contributed to a number of World Bank reports, including the Environment for Women’s Entrepreneurship in the Middle East and North Africa Region; Golden Growth: Restoring the Luster of the European Economic Model; the Jobs Study – Assessing Private Sector Contributions to Job Creation and Poverty Reduction; and the Turkey Investment Climate Assessment: from Crisis to Private Sector Led Growth. She holds a PhD in Economics and a Laurea in Political Science from the University of Rome, la Sapienza.
Rolph Van Der Hoeven
Erasmus University (EUR) in The Hague
Rolph van der Hoeven is emeritus Professor of Employment and Development Economics at the International Institute of Social Studies (ISS) of Erasmus University (EUR) in The Hague, the Netherlands, member of the Advisory Council on International Affairs (AIV) of the Dutch Government, and member of the Committee for Development Policy of the UN (UN-CDP). He also serves on the board of a number of international institutions, NGO’s and journals. Rolph was formerly Director of ILO’s Policy Coherence Group, where he spearheaded the ILO’s interaction and cooperation with the UN, IMF and World Bank on policy coherence. He was also Manager of the Secretariat of the World Commission on the Social Dimension of Globalization. Other previous positions include Chief Economist of UNICEF in New York, where he was part of the team that launched the campaign on Adjustment with a Human Face, and policy analyst for the ILO in Ethiopia and Zambia, where he advised African governments on employment and income policies. He was involved in various research projects of the United Nations World Institute on Development Economics Research (UNU-WIDER) on globalization, inequality, and employment.
Rolph holds a PhD in Development Economics from the Free University (VU) Amsterdam and an MSc in Econometrics from the University of Amsterdam (UVA) He is the author of a dozen books, and many articles and book chapters on issues as basic needs, income inequality, employment, structural adjustment, globalization and sustainable development. His latest (co-authored) volume is Sustainable Development Goals and Income Inequality
Head of Unit
Katia Berti is Head of Unit on the Employment and Social Aspects of the European Semester at the European Commission, Directorate-General for Employment, Social Affairs and Inclusion. Before that, she worked on EMU deepening and the macroeconomy of the Euro Area and on fiscal sustainability issues in the Directorate General for Economic and Financial Affairs. She has a PhD in international economics from the University of Nottingham and completed postgraduate studies at Universitat Pompeu Fabra and the College of Europe.
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