Employment, Equity and Human Development
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1 Employment, Equity and Human Development By Rizwanul Islam (e mail: Global meeting on Post 2015 Framework for Development: Growth, Structural Change and Employment, Tokyo, May
2 Contents Introduction: issues and questions addressed The nexus between growth and employment Global and domestic policies for inclusion, equity and employment Vulnerability of employment and security 2
3 Introduction Issues highlighted in the note for the session Incluson/exclusion Equity and widening wage gaps Vulnerability of employment The point of departure Growth is necessary but not sufficient for employment and human development Why and how of the problem 3
4 Introduction (contd.) Question raised: How can the goals of inclusion, equity and employment security be achieved by global and domestic policy responses? 4
5 Inclusive Development Characterization of inclusive development Stable economic growth that is sustainable Reduction of poverty and income inequality Growth of productive and decent employment Improvement in the access to education and health services Basic social protection for all citizens 5
6 The Nexus between Growth and Employment Why does the relationship between growth and employment vary? Common answer: labour market rigidity But how solid is the empirical evidence for this answer? The empirical evidence does not support this view Need for a broader framework combining economic and labour market policies 6
7 The Nexus between Growth and Employment (contd.) Why are economic policies important? Because pattern of growth is important Sector and sub sector composition of growth Importance of the growth of manufacturing in relation to overall GDP growth And the growth of labour intensive industries Both the above based on the contrasting experiences of East and South East Asia and South Asia 7
8 The Nexus between Growth and Employment (contd.) Despite trade and economic liberalization, labour intensive industrialization has been limited in some countries What causes the difference? Level of development of infrastructure Policies favouring the use of capital relative to labour India: subsidies on investment and interest Nepal: artificially low price of construction equipment Vietnam: SOEs receive preferential treatment for credit 8
9 Global and Domestic Policies for Inclusion and Employment Global level action Raising awareness Making commitment Providing broad outlines of action (e.g., MDGs, Global Jobs Pact) Facilitate learning from each other Global level institutions may influence policies at the country level Importance of all rowing in the same direction 9
10 Global and Domestic Policies for Inclusion and Employment (contd.) Domestic action: Vulnerability of employment The challenge of reducing vulnerable employment (own account and wage work) Normative approach: gradual application of core labour standards to informal segments of the labour market Positive approach: improving productivity and earnings through policies and programmes Reference: conclusions of the recent e discussion on jobs and decent work in SMEs 10
11 Global and Domestic Policies for Inclusion and Employment (contd.) Domestic action: addressing vulnerability to shocks (idiosyncratic and covariant) Reducing exposure to shocks Increasing preparedness Importance of automatic stabilizers Put in place basic social protection floor Preserve and enhance human development through measures in education and health services (e.g., cash transfers) Improving capacity to adjust to shocks Through active labour market policies Preserve jobs Enhance employability and redeployment of retrenched workers Undertake job creation programmes, esp through SMEs 11
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