Global unemployment will rise to 202 million people by the end of the year – compared to 196 million people last year – unless governments can combine austerity measures with job creation, warned the International Labour Organisation (ILO) on Sunday.
According to Raymond Torres, director of the ILO's Institute for International Labour Studies, "the strategy of austerity actually has been counterproductive from the point of view of its very objective of supporting confidence and supporting the reduction of budget deficits."
The austerity and regulation strategy was expected to lead to more growth, which is not happening," said Torres to AFP.
Europe, in particular, was guilty of “ill-conceived fiscal austerity”, said Torres, which coupled with tough labour market reforms, had caused a loss of confidence and skills among jobseekers.
"The narrow focus of many Eurozone countries on fiscal austerity is deepening the jobs crisis and could even lead to another recession in Europe.”
"In addition, there is less progress happening in other parts of the world, for example the United States, where progress in reducing unemployment seems to be slowing down and this seems to be a trends.”
Torres is the lead author of the ILO’s World of Work Report 2012. Apart from Europe and the United States, the report also suggests that labour market recovery may be stalling in Japan. Employment rates in China, India and Saudi Arabia have also stagnated or "double-dipped", while only Latin America is reporting healthier job markets – marked by improvements in Argentina, Brazil and Mexico.
"It is unlikely that the world economy will grow at a sufficient pace over the next couple of years to both close the existing jobs deficit and provide employment for the over 80 million people expected to enter the labour market," warned the report.
Additionally, lack of credit, low investment levels in companies, and scrapping of labour rights in many countries were cited as other factors that could weigh on the global job market.
Still the ILO believes that developed countries could create up to 2.1 million jobs in the next 12 months if they chose to increase public spending by just 1 percent.
In the meantime however, countries are risking further social unrest unless they overturn certain austerity cuts.
“In over 90 percent of the countries that have implemented austerity measures, unemployment rates are still above their 2007 levels,” said the report.
"There is a growing sense that those most affected by the crisis are not receiving adequate policy attention."