The different definitions of decent work

I often think of unemployment as an indicator of the global divide. Not because it’s higher or lower in different places but because it’s an unhelpful concept in the poorest countries.

Take Ghana for example. In updating our Country Guide this week, I came across sources which estimated unemployment variously between 2% and 20%. I ignored all of them. The Ghana Human Development Report explains that almost 90% of the economically active population is engaged in the informal economy. The report defines this as agriculture or unregulated micro-business.

For these workers, there is little distinction between the state of being employed and unemployed. Every able-bodied adult (and too many children) performs some sort of task dedicated to supporting the household.

As one of the more successful African economies, Ghana has a range of “safety net” welfare schemes in place. But unemployment ranks too low in social spending priority compared with food aid for kids in school, perks for expectant mothers and a national health insurance scheme.

Rich countries have unemployment and fret about it exceedingly; poor countries are more concerned about poverty than formal jobs. We therefore need to interpret carefully those media headlines about thousands of job losses “worldwide”. Adopting global unemployment as a measure of the impact of the economic crisis treats developing countries as though they don’t exist.

The International Labour Organisation (ILO) advances the debate by creating three categories to describe the status of lacking decent work. These are unemployment, working poor (earning less than $2 per day) and vulnerable workers (surviving in the informal economy). The ILO’s annual Global Employment Trends report published this week makes predictions about the impact of the recession on each of these categories.

I found the report rather thin on economic insight and was drawn, somewhat reluctantly, to a Financial Times article by George Soros. After several thousand words of rumination on credit default swaps and suchlike, he warns that poorer countries “will require large contingency funds at little notice”, pointing out that…..

“…..the current system favours the countries in control of the international financial institutions, notably the US, to the detriment of nations at the periphery. The periphery countries have been subject to the market discipline dictated by the Washington consensus but the US was exempt from it. How unfair the system is has been revealed by a crisis that originated in the US yet is doing more damage to the periphery.”

What worries me is that we’re hearing these home truths from a rampant liberal marketeer like Soros. Are events moving too fast for development campaigners?

Governments are printing money like confetti with the single thought of keeping the lid on unemployment in their own patch. But globalisation is surely too far advanced for such insularity. What Soros is saying in a roundabout way is that economic “stimulus” is a zero sum game. The big losers will be the poorer countries who aren’t allowed to print money.

He’s usually right.


this article was first published by OneWorld UK