Migrant Labor Go Home in ‘Great U-Turn’

A massive migration of emigrants who had moved from developing to developed countries back to their homelands is happening. “The Great U-Turn,” as it was dubbed, is due to the depressed job market in developed countries affected by the global economic crisis. According to the U.S. Department of Labor on Friday, unemployment in the United States rose to 9.4 percent in May, the highest in 26 years. 

There are no statistics figures on the total number of migrants on their way back to the native land, but government papers at the national level and reports by research bodies confirm the trend. The number of Mexican immigrants in the U.S. in the first quarter of this year dropped 13 percent from a year ago. The number of Mexicans leaving the U.S. was greater than the number who entered, with 139,000 and 137,000, respectively. 

In the U.K., the number of labor migrants from recent additions to the European Union such as Poland and the Czech Republic shrank by 55 percent in the first quarter of this year compared to a year ago. In Singapore, some 200,000 migrant workers are expected to return to their home countries by next year. Hiring of skilled foreign workers fell by 14 percent in Australia. And the United Arab Emirates, where the construction boom has died down, will see its population drop as many migrant workers leave. 

Some experts predict the development will continue even when the global economy recovers. Better jobs are being created in developing countries, and job prospects in developed countries are increasingly dim as they favor their own nationals. In a recent poll by Harvard University, 72 percent of Chinese and 56 percent of Indians who returned to their native countries said they have better job opportunities at home. Some 100,000 Chinese and Indians have returned to home in the past 20 years, but Harvard predicted 200,000 Chinese and Indians will go home in the next 10 years.

 

EU wants the rules loosened to save some jobs

With many of the 27 European Union countries racked by a recession that has put millions of workers on the streets, the European Commission has offered to help mitigate the impact  on the dwindling labour market by speeding up the expenditure of 19 billion Euro (USD 27 billion) in community funds until 2010. Under a proposal unveiled by Commission President Jose Manuel Barroso and Employment Commissioner Vladimir Spidla, EU governments will temporarily be freed from the obligation to put money into projects co-funded by the European Social Fund (ESF), the commission’s main financial instrument for supporting employment. 
The move is deemed necessary because many member states are unable to provide part of the money due to the strains that the economic crisis is placing on their national budgets. “Most of our member states are under heavy pressure on their national budgets. We are telling them that we will put 100 percent of the money if you do (projects) for employment and training,” Barroso said. “We are doing this because there is a social urgency,” he said, noting that unemployment is the main concern of European citizens. 
The ESF is one slice of the Commission’s structural funds, which are designed to improve economic development and which have a total budget of 347 billion Euro over the 2007-13 period. And Commission officials say their next move will be to propose temporarily relaxing the co-financing rule for the EU’s regional and cohesion funds. The biggest recipients of the ESF – which Brussels says helps more than nine million people find a job each year, mainly through training – are Poland, Germany and Spain. Money is allocated according to a country’s population and relative wealth. 
The proposal comes in the wake of worrying new unemployment figures, which showed the EU jobless rate climbing to 8.6 percent in April. In May, the commission predicted that some 8.5 million Europeans would lose their jobs over the next two years, with unemployment exceeding 10 percent in 2010. The commission’s plans could, however, face resistance from some member states, notably Germany, when they are discussed by EU leaders at their regular summer summit on June 18-19. 
In the meantime, Barroso and Spidla also want member states to prevent layoffs by encouraging the use of short-time work, cutting workers’ hours and using the rest of the time for training. They are also proposing the creation, with the help of the European Investment Bank, of a micro-credit facility worth 100 million Euro to help Europeans set up small businesses. The proposals were criticised by the Socialist grouping of the European Parliament, which compared them to trying to extinguish a fire in a house by using a glass of water. 
In Spain, the hardest hit in terms of joblessness, the official level of unemployment fell to 3.6 million people in May, experiencing its first decline in 14 months, the Labour Ministry said.
Unemployment went down by about 24,700 people, after rising for 14 consecutive months. The figure did not yet mean that Spain had overcome its economic difficulties, senior official Maravillas Rojo conceded. Spain went into a recession late last year after being hit by the collapse of its construction sector and the international crisis.  In April, the National Statistics Institute put the jobless rate at 17.4 per cent, the highest in the European Union. 
The French labour market was seriously affected by the economic crisis in the first quarter of 2009 as unemployment soared to 8.7 per cent for the period, the government’s statistics office INSEE said. That represents some 2.46 million jobless people in the workforce and is up from 7.6 percent in the fourth quarter of last year. 
Including France’s overseas territories, the unemployment rate for the first quarter of this year was 9.1 percent, INSEE said. “This is a bad result … a very substantial deterioration,” Finance Minister Christine Lagarde told Europe 1 radio. Lagarde said the depressed labour market “will continue,” and noted that French GDP is expected to shrink by “about three percent” this year.

 

Tough times on the labour market

In the Developed Economies and European Union, total employment is projected to shrink this year by between 1.3 per cent and 2.7 per cent. The region is likely to account for 35 per cent to 40 per cent of the total global increase in unemployment, despite accounting for less than 16 per cent of the global labour force.

In Central and South Eastern Europe (non-EU) and CIS the number of unemployed could increase by as much as 35 per cent in 2009. Total employment is set to shrink by between one and 2.8 per cent.

In East Asia, it is estimated that 267 million people, representing more than one third of the total employed, were living on less than $2 per day at the onset of the crisis.

There were about 12 times as many people in vulnerable employment as in unemployment.

In South East Asia and the Pacific a fairly moderate increase in unemployment is projected for this region, though workers and firms in export-oriented industries are being hit hard.

In South Asia, about five per cent of the labour force is unemployed but nearly 15 times as many workers are employed, but in vulnerable employment. The number of workers living on less than $2 per day is projected to grow by up to 58 million between 2007 and 2009.

In Latin America, the unemployment rate is projected to rise from 7.1 per cent in 2007 to between 8.4 and 9.2 per cent in 2009.

The ILO projects an increase in unemployment of up to 25 per cent in the Middle East and up to 13 per cent in North Africa in 2009 compared to 2007. Vulnerable employment is also expected to increase in both regions. Around one in three workers in each region are in vulnerable employment and this ratio could rise to as much as four in 10.

In sub-Saharan Africa, an estimated 73 per cent of the workers are in vulnerable employment, and this could rise to 77 per cent this year. The crisis poses a serious threat to investment in infrastructure and capital goods that are crucial for the region’s continued development.

The potential harm of global trade protectionism in response to the crisis should not be understated.

 

Hungary struggles to rein in runaway pension costs

 

Hungary struggles to rein in runaway pension costs

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Reuters, Wednesday June 3 2009

* Steps taken to remedy pension problems but more needed

* Demographics problems similar as elsewhere in EU

* High debt, taxes, and system anomalies root of problem

By Balazs Koranyi

BUDAPEST, June 3 (Reuters) – Hungary may emerge healthier from reforms forced on it by its economic crisis but its politicians have not done enough to defuse the ticking timebomb that is one of Europe’s weakest pension systems.

The country’s poor demographics, failed reform, heavy and ineffective taxation, a skewed labour market and heavy debt burden all threaten the system with collapse and require quick action, analysts say.

They got some of that from a caretaker technocrat government appointed, after last year’s IMF bailout, to hold the fort and implement painful reforms before elections in 2010.

The new administration has slashed pensions, which account for about 20 percent of total budget spending, and scrapped the indexing system that made pension hikes, even in a time of economic recession, mandatory.

But analysts say there is still much to do — and little sign conservatives Fidesz will implement further reforms if, as expected, they take power at elections in 2010.

“The private pillar is (still) uncompetitive, lacks transparency, it’s expensive and makes poor returns … (and) the public system is bleeding from a thousand wounds,” said Peter Holczer, who heads the Pension Roundtable, an advisory board set up by the government.

Budapest’s finances are now being kept afloat by the $25.1 billion IMF-led rescue package. But it still faces a 6.7 percent contraction in its economy and expects its public debt level to hit 80.2 percent of GDP this year.

Consulting firm Deloitte last year estimated that unless the system is changed, the public pension system’s deficit will go from 0.8 percent of GDP in 2007 to 3.7 percent by 2050.

FEW WORKING

Pension problems are a familiar theme across Europe, where ageing populations and the falling percentage of the population working have prompted many governments to implement politically painful reforms.

But Hungary’s high public debt, high budget deficit and widespread tax evasion make the problem more acute than elsewhere. Unemployment is far from eastern Europe’s highest at 9.9 percent, but, at 54 percent, it has one of the lowest employment rates in the 27-nation European Union.

Disability pensions are perhaps the biggest anomaly in the system and successive governments have failed to address it. Critics say the system is both corrupt and inept.

Over 800,000 people, or more than 10 percent of the adult population receive disability pension and nearly a third of all pensioners are below the retirement age.

“Disability pensions are not a pension issue but a social and labour market issue,” Holczer said. “The state has used pensions to solve social tensions and to keep unemployment down.”

Tamas, 37, who asked not to be named, is nearly completely blind and receives a full disability pension because of that. He is also the CFO of a large international firm’s Hungarian unit with a salary in the top 10 percent of the population.

He tried to get his pension cancelled but simply could not.

“I was sent from one office clerk to another and I was told it couldn’t be done. Once you get it, you get if for life. And I was told that instead of complaining, I should be thankful I’m getting help,” Tamas said.

“It’s idiotic. I earn around 20 times the minimum wage but nobody cares, they keep sending me the money. Fine, it’s free money, I’ll take it.”

BOTCHED REFORM

Hungary has launched pension reform before. In 1997 it put in place an internationally acclaimed system that relied on setting up the “second pillar”, or private funds next to the pay as you go system.

But mediocre fund regulation, poor state administration and frequent regulatory changes resulted in a poor operating figures for the private funds and failed to encourage people to take part.

“Young people today lack any trust in the system and are convinced they’ll never get their money back so they’re not willing to take part in the system,” Holczer said.

Pensioners make up more than 25 percent of the population now but Deloitte estimates that this rate will rise to 35.5 percent by 2050 if the system is not overhauled.

As such, touching pensions is also politically sensitive and government after government avoids the issue to maintain the favour of a key voting block.

Little is known about what Fidesz will do, as polls show, it wins by a landslide in elections due early next year, but analysts say Hungary now has no fiscal room for manoeuvre — at least making any retreat on reforms unlikely.

“It’s pretty clear to people (politicians) that a reversal of reforms would be counterproductive,” said HSBC analyst Juliet Sampson.

“Politicians in Hungary had a lot of leverage for years and they have no leverage now, they can only walk on one path.”

* Steps taken to remedy pension problems but more needed

* Demographics problems similar as elsewhere in EU

* High debt, taxes, and system anomalies root of problem

 

BUDAPEST – Hungary may emerge healthier from reforms forced on it by its economic crisis but its politicians have not done enough to defuse the ticking timebomb that is one of Europe’s weakest pension systems.

The country’s poor demographics, failed reform, heavy and ineffective taxation, a skewed labour market and heavy debt burden all threaten the system with collapse and require quick action, analysts say.

They got some of that from a caretaker technocrat government appointed, after last year’s IMF bailout, to hold the fort and implement painful reforms before elections in 2010.

The new administration has slashed pensions, which account for about 20 percent of total budget spending, and scrapped the indexing system that made pension hikes, even in a time of economic recession, mandatory.

But analysts say there is still much to do — and little sign conservatives Fidesz will implement further reforms if, as expected, they take power at elections in 2010.

“The private pillar is (still) uncompetitive, lacks transparency, it’s expensive and makes poor returns … (and) the public system is bleeding from a thousand wounds,” said Peter Holczer, who heads the Pension Roundtable, an advisory board set up by the government.

Budapest’s finances are now being kept afloat by the $25.1 billion IMF-led rescue package. But it still faces a 6.7 percent contraction in its economy and expects its public debt level to hit 80.2 percent of GDP this year.

Consulting firm Deloitte last year estimated that unless the system is changed, the public pension system’s deficit will go from 0.8 percent of GDP in 2007 to 3.7 percent by 2050.

FEW WORKING

Pension problems are a familiar theme across Europe, where ageing populations and the falling percentage of the population working have prompted many governments to implement politically painful reforms.

But Hungary’s high public debt, high budget deficit and widespread tax evasion make the problem more acute than elsewhere. Unemployment is far from eastern Europe’s highest at 9.9 percent, but, at 54 percent, it has one of the lowest employment rates in the 27-nation European Union.

Disability pensions are perhaps the biggest anomaly in the system and successive governments have failed to address it. Critics say the system is both corrupt and inept.

Over 800,000 people, or more than 10 percent of the adult population receive disability pension and nearly a third of all pensioners are below the retirement age.

“Disability pensions are not a pension issue but a social and labour market issue,” Holczer said. “The state has used pensions to solve social tensions and to keep unemployment down.”

Tamas, 37, who asked not to be named, is nearly completely blind and receives a full disability pension because of that. He is also the CFO of a large international firm’s Hungarian unit with a salary in the top 10 percent of the population.

He tried to get his pension cancelled but simply could not.

“I was sent from one office clerk to another and I was told it couldn’t be done. Once you get it, you get if for life. And I was told that instead of complaining, I should be thankful I’m getting help,” Tamas said.

“It’s idiotic. I earn around 20 times the minimum wage but nobody cares, they keep sending me the money. Fine, it’s free money, I’ll take it.”

BOTCHED REFORM

Hungary has launched pension reform before. In 1997 it put in place an internationally acclaimed system that relied on setting up the “second pillar”, or private funds next to the pay as you go system.

But mediocre fund regulation, poor state administration and frequent regulatory changes resulted in a poor operating figures for the private funds and failed to encourage people to take part.

“Young people today lack any trust in the system and are convinced they’ll never get their money back so they’re not willing to take part in the system,” Holczer said.

Pensioners make up more than 25 percent of the population now but Deloitte estimates that this rate will rise to 35.5 percent by 2050 if the system is not overhauled.

As such, touching pensions is also politically sensitive and government after government avoids the issue to maintain the favour of a key voting block.

Little is known about what Fidesz will do, as polls show, it wins by a landslide in elections due early next year, but analysts say Hungary now has no fiscal room for manoeuvre — at least making any retreat on reforms unlikely.

“It’s pretty clear to people (politicians) that a reversal of reforms would be counterproductive,” said HSBC analyst Juliet Sampson.

“Politicians in Hungary had a lot of leverage for years and they have no leverage now, they can only walk on one path.”

 

EU unveils Blue Card for skilled labor

WITH falling, if not fully negative, birth rates and faced with the United States’ own drive to obtain skilled workers and professionals, the European Union (EU) has established its “Blue Card” residence visa for the foreign workers it needs to remain competitive in a globalized post-industrial world.  This is seen by Manila as a boon for Filipino workers, of whom about 90,000 of the 900,000 in the EU are undocumented, although many of these illegal overstayers are skilled workers and professionals. The Blue Card visa gives the qualified foreign workers legal work residence in all EU member-countries, and also permits them to transfer from one EU country to another without further documentation. “The period of validity of the EU Blue Card will be between one and four years, with the possibility of renewal. A Blue Card may also be issued or renewed for smaller periods in order to cover the work contract, plus three months,” said the Council of EU in a press statement. The Brussels-based Council of the European Union adopted the resolution establishing the Blue Card residence permit on May 25 this year, but it may need up to two years to become effective because each member-country will still have to merge it with its own laws. Europe’s population growth has been on steady decline in the last two decades, resulting in the scarcity of highly qualified labor, so that in Germany retirees are being called back to work. A European Commision (EC) paper predicts the region will lose half of its work force in the next 50 years if the reduced birth rates continues. Ambassador Alistair Macdonald, head of the Delegation of the European Commission to the Philippines, said the EU Blue Card system will “have to be translated into national laws” by the EU member states within two years before it can be implemented. But he said EU members such as the United Kingdom, Ireland, and Denmark are not included in the countries that need to adopt the Blue Card system. In a statement, the Council of the European Union said the Blue Card system establishes more attractive work conditions for foreign workers to take up highly qualified employment in the EU member states, seeing that it gives them a series of socioeconomic rights and favorable conditions for family reunification and movement across EU states. Macdonald said the presence of Filipino workers has contributed a lot to the region’s economic development and “Europe is very thankful to the Filipino workers.” He said the Council of the European Union has also adopted the Employers’ Sanctions Directive that provides criminal penalties to employers of illegal migrants and those who exploit victims of human trafficking. Human trafficking has been a big headache in Europe, but they do not involve Filipinos. Macdonald said most of the victims of human trafficking in Europe come from Africa and China.

 

Number of labour exploitation cases rises in Czech Republic

 

Plzen – The number of labour exploitation cases rose in the Czech Republic from three in 2008 to ten last year, most of the victims being foreigners, according to data released at a conference held within a meeting of the European Crime Prevention Network committee today.

Experts said at the conference they expect trade in people for the purpose of forced labour to continue.

According to unofficial data, Czechs are also victims of labour exploitation, mainly in the “old” EU countries.

Statistics show that labour exploitation is the second most frequent form of trade in people after sexual exploitation. It is estimated that its proportion will gradually grow from one third at present to one half in the future.

“Trade in people for the purpose of forced labour is new for the whole of Europe. In the Czech Republic it has been registered since 2004 when an amendment to the penal law was passed. Under it not only sexual exploitation, but also other forms such slavery, serfdom, forced labour and others are registered,” Lenka Myslikova, from the Czech Interior Ministry, said.

She said mainly Mongolians and people from the countries of the former Soviet Union are most often labour exploited in the Czech Republic.

“These people work up to 16 to 18 hours a day, seven days a week. They do hard labour that poses health risks,” she said.

They often get a minimal wage, if any. Organised groups prevent them from leaving by artificially raising their debts, threatening them and using violence against them.

Myslikova said the situation in the Czech Republic is relatively good and that it is connected with migration.

The ministry, however, says the situation may worsen as people who lose work in consequence of the economic crisis are prone to crime.

The police squad for uncovering organised crime released in April information about the detention of three Slovaks in south Bohemia over alleged trafficking in people.

According to the police they were luring homeless people and foreigners in distress, offering them hired labour. The people then worked in intolerable conditions and under the threat of force.

The Czech Republic is also a transit country for people with false documents being transported further on to other EU countries.

Of late, it has also become a source country and its citizens work in inhuman conditions in Britain, for instance.

Plzen – The number of labour exploitation cases rose in the Czech Republic from three in 2008 to ten last year, most of the victims being foreigners, according to data released at a conference held within a meeting of the European Crime Prevention Network committee today.

 

Experts said at the conference they expect trade in people for the purpose of forced labour to continue.

According to unofficial data, Czechs are also victims of labour exploitation, mainly in the “old” EU countries.

Statistics show that labour exploitation is the second most frequent form of trade in people after sexual exploitation. It is estimated that its proportion will gradually grow from one third at present to one half in the future.

“Trade in people for the purpose of forced labour is new for the whole of Europe. In the Czech Republic it has been registered since 2004 when an amendment to the penal law was passed. Under it not only sexual exploitation, but also other forms such slavery, serfdom, forced labour and others are registered,” Lenka Myslikova, from the Czech Interior Ministry, said.

She said mainly Mongolians and people from the countries of the former Soviet Union are most often labour exploited in the Czech Republic.

“These people work up to 16 to 18 hours a day, seven days a week. They do hard labour that poses health risks,” she said.

They often get a minimal wage, if any. Organised groups prevent them from leaving by artificially raising their debts, threatening them and using violence against them.

Myslikova said the situation in the Czech Republic is relatively good and that it is connected with migration.

The ministry, however, says the situation may worsen as people who lose work in consequence of the economic crisis are prone to crime.

The police squad for uncovering organised crime released in April information about the detention of three Slovaks in south Bohemia over alleged trafficking in people.

According to the police they were luring homeless people and foreigners in distress, offering them hired labour. The people then worked in intolerable conditions and under the threat of force.

The Czech Republic is also a transit country for people with false documents being transported further on to other EU countries.

Of late, it has also become a source country and its citizens work in inhuman conditions in Britain, for instance.

 

Gender discrimination still exists today

 

Gender discrimination still exists today

ISTANBUL – A survey conducted by Bahçeşehir University on radicalism and extremism has revealed the deep abyss of discrimination that still exists in Turkey. By interviewing 1,715 people, both men and women, in 34 cities around Turkey, the researchers collected data on the country’s outlook toward the European Union, among other topics. One of the most striking results was on the subject of gender equality. According to the research, 84 percent of participants agreed that a woman should ask for the approval of her husband to work at a job, which goes a long way toward explaining why the female labor force is small compared to European Union countries. Seventy-four percent of participants agreed that being a housewife is as satisfying as working and earning money, another factor clarifying the low number of women in the workforce. Only 25 percent of the respondents said they think taking care of the home is not adequate for women. One percent did not answer the question. Who makes the decisions at home Most of the participants do not perceive women as being the decision-makers at home, even though they agree that women should take care of the household. Housework is seen as “women’s work” in Turkish culture, with women considered responsible for taking care of the home and children. Men are usually seen as breadwinners who earn money to support the household, which makes them feel like the decision makers and the leaders of their families. According to the survey, 71 percent say men are the family leaders in Turkish society. Nearly 60 percent of the participants also said they think men are, in general, better at being political leaders than women. However, 80 percent said they think women’s college education is as important as men’s education. The research also revealed opinions on dress, with 72 percent of the participants saying that Muslim women should cover their heads outside of the house and 58 percent of people agreeing that women commit a sin when they walk along the seaside or on the beach in a swimsuit. Although more than half the people said women should cover their heads and not wear swimsuits, a majority was also against violence. Sixty-eight percent of the participants disagreed with the idea that some wives may deserve to get beaten by their husbands. While 90 percent of participants said it was wrong for a man to have more than one wife, only 78 percent said it is wrong to stone an adulteress to death. Twenty-two percent said it is right to kill a woman who cheats on her husband. This research has revealed that there is still a different approach toward women in Turkish society. It seems that Turkey needs to make much progress before it acquires an awareness of gender equality.

 

Poland,Labour Force after Communism.

About 30.7 percent of Poland’s estimated population of 38.3 million lived in urban centers with populations of 100,000 or more. The priority given urbanization and industrialization in postwar Poland caused the urban working class to grow dramatically and the rural working class to shrink proportionately in the first decade of communist rule. This process slowed considerably over the next three decades.

Nearly 22 million Poles were of working age: 11.3 million men between the ages of eighteen and sixty-four years and 10.6 million women between ages eighteen and fifty-nine. The population was relatively well educated.About 1.8 million people had a postsecondary education, another 7.0 million had a secondary education, and 6.7 million had a basic trade education .

 The total labor force of 18.4 million included 36.8 percent employed in manufacturing, mining, and construction; 25.7 percent in agriculture, forestry, and fishing; and 7.1 percent in transport and communications. About 12 million workers, or 70 percent of the work force, worked in the state sector.

The communist system was marked by major inequality of labor allocation. In spite of considerable overstaffing in both production and administrative units, labor shortages were a perennial problem in other areas of the economy. Unemployment began to grow in January 1990, partly as the result of the reform policies of the postcommunist governments and partly because of the collapse of markets in the Soviet Union and the German Democratic Republic (East Germany), which were Poland’s most important trading partners in Comecon. At the end of 1991, unemployment had reached 11.4 percent. Unemployment benefits, an unemployment insurance system, and some retraining were introduced in early 1990.

Wage increases in the state sector were controlled by a very steep tax on wages that exceeded prescribed levels. In the private sector, the labor market operated without such restrictions, however. Wages generally were low in the first reform years. In 1991 the average monthly wage was 2,301,200 zloty (for value of the zloty–see Glossary), not including agricultural labor and positions in education, health and social services, culture, law and order, national defense, and public administration. At that time, however, rents were low, electricity, gas, and fuels remained partly subsidized, and medical services were free.

In 1992 two nationwide labor unions existed. The Solidarity labor union (Solidarnosc) was internationally known for the decade of strikes and efforts to achieve reform that finally thrust it into a central political role in 1989. The National Coalition of Labor Unions, originally established by the communist government after the suppression of Solidarity in the early 1980s, became independent of state control in 1990 and began to compete with Solidarity for members.

 

Asia Labour Force; estimates for 2015.

The prospects for successful economic integration, improved competitiveness and 

more productive employment in the coming years are significantly influenced by 

demographic factors, labour force trends, rapid technological change and global 

competition. 

ASEAN’s labour force is massive and still growing. In 2007, it stood at about 

285 million and is expected to increase by around 40 million, or 14.1 per cent, 

between 2007 and 2015. The fastest labour force growth is projected to occur in 

countries with the greatest numbers of people who are poor and the largest informal 

economies, among them Cambodia, the Lao People’s Democratic Republic and 

the Philippines. And yet, the rate of labour force growth is slowing in other ASEAN 

countries (Singapore and Thailand) primarily due to demographic trends and ageing 

populations. In the coming years, these countries will increasingly need to address 

labour shortages and the related economic and social consequences, including the 

growing importance of skills development and adequate social security coverage. 

Globalization, technological change and accelerated ASEAN integration, 

among other factors, will continue to spur further structural transformation.

 

By  2015, the services sector is expected to be the largest sector in terms of employment in the region, accounting for over 41 per cent of total employment – up from 36.5 per cent in 2007. Underlying this trend, employment in ASEAN’s services sector will increase by a projected 28 million between 2007 and 2015, with employment in industry growing by 17.6 million and employment in agriculture declining by 7.1 million. The share of those vulnerable in total employment will remain enormous. In 2015, more than 55 per cent of ASEAN’s workers are likely to be characterized as vulnerable, although this represents a decrease from 60.1 per cent in 2007. Importantly, vulnerability is not only restricted to own-account workers and contributing family members but also wage workers who are in casual, part-time or temporary employment and other forms of atypical employment. By 2015, most of ASEAN’s population will reside in urban areas. Aside from natural increases, rural-to-urban migration is expected to continue or even escalate. Between 2007 and 2015, the region’s urban population will grow by an estimated 64.1 million, or nearly 25 per cent. The rural population will shrink by 9 million, or 2.9 per cent. In terms of the urban population growth rate, the most dramatic shifts will take place in Cambodia, Indonesia, the Lao People’s Democratic Republic and Viet Nam. Countries experiencing such rapid urban population growth will have to cope with the challenge of creating decent and environmentally friendly jobs in their bulging and increasingly polluted cities. 

 

Labour Trends;Asia

The region’s strong economic performance in 2007 had a positive impact on its 

labour markets. Employment in ASEAN countries increased from 260.6 million 

in 2006 to 268.5 million in 2007, an increase of 3 per cent, or 7.9 million additional 

jobs. Employment growth was particularly strong in Singapore (6.6 per cent) and 

Indonesia (4.7 per cent). The Philippines also experienced buoyant employment 

growth of 2.4 per cent. 

Some 72 per cent of the region’s job growth in 2007 took place in industry 

and services. This played a role in lifting the regional productivity level by 3 per 

cent because labour productivity is higher in both industry and services than in 

agriculture. And yet, agriculture still accounts for 44.5 per cent of ASEAN’s total 

employment, albeit with considerable variation across countries, ranging from less 

than 1 per cent in Singapore to over 80 per cent in the Lao’s People Democratic 

Republic.

About 64 per cent of the region’s employment growth in 2007 was in the 

form of increased wage employment, which indicates a possible expansion in 

formal employment opportunities. Despite this positive trend, the number of 

vulnerable workers, measured by own-account workers and unpaid family members 

– many of whom work in the informal economy – remained massive. An estimated 

161 million workers, or about 60 per cent of the ASEAN workforce in 2007, were 

characterized as vulnerable. Women constitute a disproportionately large share of 

these vulnerable workers, reflecting their limited employment opportunities. 

The regional average also masked significant variation by country. The share 

of own-account workers and contributing family workers in total employment, 

for example, ranged from over 70 per cent in Cambodia, the Lao People’s 

Democratic Republic and Viet Nam to around 50 per cent in Thailand and below 

10 per cent in Singapore. 

Unemployment shrank by about 550,000, or 3.2 per cent, easing to 16.5 

million in 2007. The region’s unemployment rate declined from 6.1 per cent in 

2006 to 5.8 per cent in 2007. Much of the improvement comes from positive 

developments in Indonesia and the Philippines – two populous countries with 

high unemployment rates in recent years. Unemployment in Indonesia dropped 

sharply from 10.3 per cent in 2006 to 9.1 per cent in 2007. In the Philippines it 

declined from 7.3 per cent to 6.3 per cent.