Predicted Increase in World Unemployment Due to Global Financial Crisis

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An article from the International Labour Organization concerning the increase in world unemployment because of the global financial crisis.

ILO says global financial crisis to increase unemployment by 20 million

GENEVA (ILO News) ─The global financial crisis could increase world unemployment by an estimated 20 million women and men, the Director-General of the International Labour Office (ILO) said today. “We need prompt and coordinated government actions to avert a social crisis that could be severe, long-lasting and global”, he added.

Based on revised global growth estimates by the International Monetary Fund (Note 1) (IMF), the UN and early reports suggesting rising job losses for most countries where data was available, ILO Director-General Juan Somavia said the ILO’s preliminary estimates indicated that the “number of unemployed could rise from 190 million in 2007 to 210 million in late 2009.”

Mr. Somavia added that “the number of working poor living on less than a dollar a day could rise by some 40 million – and those at 2 dollars a day by more than 100 million”.

Mr. Somavia also said that the current crisis would hit hardest such sectors as construction, automotive, tourism, finance, services and real estate. He also noted that the new projections “could prove to be underestimates if the effects of the current economic contraction and looming recession are not quickly confronted”.

“This is not simply a crisis on Wall Street, this is a crisis on all streets. We need an economic rescue plan for working families and the real economy, with rules and policies that deliver decent jobs. We must link better productivity to salaries and growth to employment”, Mr. Somavia said.

“Protecting and promoting sustainable enterprises and decent work opportunities must be at the heart of the Summit on the Financial Crisis recently announced by Presidents Bush and Sarkozy”, he added. “We must return to the basic function of finance, which is to promote the real economy. To lend so that entrepreneurs can invest, innovate, produce jobs and goods and services.”

Mr. Somavia said his concerns included restoring credit flows; maintaining and enhancing social protection, including pensions, unemployment benefits, child support and health care schemes; ensuring enterprise access to credit to avoid layoffs, wage cuts, bankruptcy and permit recovery, respect for workers’ rights and deepening social dialogue to deal with the impact on enterprises; ensuring ODA flows; rebuilding a regulatory regime for global finance; and moving quickly from recovery to sustainable development through investment and growth.

“We welcome the current calls for better financial regulation and a global surveillance system of checks and balances, but we must reach beyond the financial system”, the ILO Director-General said.

“Long before the current financial crisis, we were already in a crisis of massive global poverty and growing social inequality, rising informality and precarious work – a process of globalization that had brought many benefits but had become unbalanced, unfair, and unsustainable”, he said. “We need to get the balance right and concentrate on rescuing people and production. It’s about saving the real economy.”

“In order to keep open economies and open societies going, we must begin working together among relevant international organizations to develop a new multilateral framework for a fair and sustainable globalization. Trade talks are stalled; financial markets are on the brink, climate change continues; any reconstruction will have to find ways to integrate financial and economic, social and labour and environmental policies in a common sustainable development approach”, he said.

“This is the time to think and act in bold and innovative ways to confront the huge challenges before us, particularly for the United Nations”, Mr. Somavia said, referring to the forthcoming meeting next weekend of the United Nations Chief Executives Board (CEB) chaired by the Secretary-General Ban Ki-Moon.

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Note 1 – The IMF’s World Economic Outlook issued on 8 October projected 3.2 per cent global growth for 2009, down from its original projection of 4.6 per cent for 2008. In 2006 and 2007 projections were 5.5 and 5.6 per cent respectively.

Know Your Basic Labor Rights

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Basic rights given to all Filipino workers as outlined in Article 13 Section 3 of the 1987 Philippine Constitution.

• The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.

• It shall guarantee the rights of all workers to self-organizations, and peaceful concerted activities, including the right to strike in accordance with law.

• They shall be entitled to security of tenure, humane conditions of work, and a living wage.

• They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

• The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

• The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth.

Inappropriate Use of the Non-compete Clause

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One of the major violations committed by a lot of companies in the country is the use (or misuse) of the non-compete clause in the job contracts given to newly hired employees. A non-compete clause is a proviso used by companies to primarily protect its business from competitors such as disclosure of valuable information central to the operations or essential details that define the merchandise or goods of the business. It is an agreement wherein the employee is not allowed to engage in a similar profession or trade in competition against the company for a certain period.

This particular condition could only be used or is applicable only to those occupying key positions in the organization. Those key positions are those who have or possess by virtue of their function the trade secret(s) of the business such as management level positions and those whose function(s) are deemed crucial to the product or service as dictated by the nature of the business. However, the abovementioned clause is very much exploited (if I may use the word in the context of over utilization) as a lot of organizations predominantly those who tend to impose such across all positions (primarily rank and file posts) in their organization. If the said clause is to be required or used as a “security bond” to those workers who do not fall under the category of having the business’ trade secret it is deemed as an infringement of the right of the worker. This in conflict with the stipulation set forth by the Philippine Labor Code Article 12b which asserts that every individual desiring to work either locally or abroad should be given protection by securing the best employment terms and conditions.

Preventing the worker to fully realize his or her value and potential by limiting the marketability of the individual is a blind alley not only for the firm but also has a distressing impact on the country. Limiting the worker to find a job after leaving the organization could lead to unemployment. It is more of a deterrent than what is said to protect the business from loosing its footing in the market. It increases the social costs as well as hampers the growth and development of the country’s economy.

Cut Me Some Labor Slack

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Just after I was discharged from the hospital I finished my thirteen-page (nice number isn’t it?) policy paper for my Labor Law II class (IR 207.2 – Labor Standards, Justice and Equity). It dealt with some provisions from the Philippine Labor Code as well as the country’s Constitution that need to be modified and reinforced in order to address some issues that the labor sector specifically the women workforce is currently facing. To be quite honest about it, I’m not that pleased with the output. It was rushed since it was already due and I still have to review for my final exam for that same course. Luckily, I already finished all the requirements from my other class before I was hospitalized and that’s the remaining class that I have to deal with. Anyway, I already took my final exam and just right after I forwarded my test paper to my lawyer professor - Fiscal Gerardo Sadsad I just realized that it was the end of my semester. It was indeed tedious yet exultant semester for me.

My semester has ended, and I’m getting my diploma in Industrial Relations. One more semester to go and I’ll be doing my master’s thesis which until now still undecided on the topic that I’ll be covering. For now, I’ll have a couple of weeks off from doing SOLAIR stuff. Well, not totally. I still have a planning session to attend to with the student council.

I miss writing IR-related stuff, I guess after this entry I’ll post one.

I’m Back!

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After being dead sick (literally), being confined in the hospital and spending more than fifty thousand for just three days, I’m back! That was the worst in my life so far, worse than the vehicular accident I experienced in Laguna years ago. I thought I was about to die (seriously), I was quite lucky that I had a first-rate doctor - a consultant of the hospital who took good care of me , although I have to say that his professional fee (including the hospital bill) was way above the stars. Nonetheless, he’s good. Actually, all the doctors I encountered were quite good, for some medical-work-related reason or the other (and it just reminded me of someone, a very special someone in the past).

Being confined in the hospital was not that bad, except of course for the bill. I have mulled over some life-related matter (which I would not discuss publicly) that should be addressed aptly and at the soonest possible time – ang nagagawa nga naman ng walang magawa ay kung hindi mag-isip.

There are a lot of things that I’m so grateful about and people other than my family I that I owe big time and should be given supreme appreciation, as in to the highest level (sounds like some remark of a certain female dj of a local fm station that I usually hear in the morning going to work). It just re-affirmed that indeed you guys are really for keeps no matter what.