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Half Of World's Workers Make Less Than $2/Day

by Gustavo Capdevila

World Bank, IMF Can't Take Credit For World Poverty Drop

(IPS) GENEVA -- That there were 185.9 million unemployed people around the world in 2003 is discouraging enough, but the fact that three times that many people were working and yet making less than one dollar a day is even more troubling.

It is only logical, then, that a new report released by the International Labor Organization (ILO) focuses not only on the problem of unemployment, but also on the plight of the working poor.

As ILO Director-General Juan Somavia stated, "What we need are not only more jobs, but better jobs."

According to Lawrence Jeff Johnson, the head of the ILO team that prepared the World Employment Report 2004-2005, the total number of working poor is higher than ever.

Of the 2.8 billion people employed globally in 2003, close to half -- or roughly 1.4 billion people -- did not make enough to rise above the two dollar a day poverty line.

In relative terms, 49.7 percent of workers in the world in general, and 58.7 percent in the developing countries, make less than two dollars daily. The proportion of the working population that does not earn even one dollar a day is 19.7 percent worldwide, and 23.3 percent in the developing nations.

On a more encouraging note, however, the report revealed that the actual percentage of working people living under the one dollar a day and two dollar a day poverty lines is lower today than in 1990.

In any event, the most significant conclusion of the report is that the creation of decent and productive employment opportunities is crucial for reducing global poverty.

Productivity is not a reflection of how hard people work, but rather, a measure of how efficiently resources are used. Labor productivity is determined by economic output, or value added, in relation to the amount of labor used to generate the output.

Thus, a poor worker in a developing country can work strenuously for long hours, under difficult physical conditions, but have low labor productivity and therefore receive a low income because he or she lacks access to technology, education, or other factors needed to raise productivity.

At the same time, a worker in a highly industrialized country may have high labor productivity despite working relatively fewer hours, the report stresses.

In Latin America and the Caribbean, there has been almost no growth in productivity over the last ten years (0.1 percent annually, on average), and poverty levels have remained relatively constant.

In sub-Saharan Africa, productivity has actually declined, while poverty has increased.

On the other hand, in regions where there has been a marked increase in productivity, like East Asia and South Asia, poverty rates have declined.

The ILO report concludes that it is not only necessary to observe where and how people are currently working, but also to focus on where they will be working in the future, and to develop and implement strategies to increase productivity and opportunities for decent employment.

The report also points to specific areas where intervention is urgently needed in the form of policies and strategies. One of these is agriculture, since 75 percent of the world's poor live in rural areas.

If strategies are adopted to raise productivity in rural areas, especially in the agricultural and service sectors, the well-being of the poor in these regions can be significantly improved, Johnson said.

The agricultural sector employs 40 percent of the developing countries' workers and contributes over 20 per cent of their GDP. It is the main source of jobs in 65 of the 162 developing countries for which employment data are available by sector.

In addition, agriculture employs the largest share of women, in the poorest regions of the world.

Throughout the 1990s, researchers and policy-makers largely neglected the agricultural sector, concentrating instead on the modernization of the industrial and service sectors.

The report notes that agricultural yields are also affected by factors beyond the control of policy-makers, such as the weather, world market prices, external trade barriers and market access.

Nevertheless, it also points to a fairer distribution of land as a means of remedying the situation, and mentions Latin America as an example of inequality in this regard.

Johnson and his colleague Dorothea Schmidt noted that the report recommends land ownership reform, but they declined to comment on the agrarian reform implemented in Zimbabwe and South Africa to modify the land distribution system established during colonial rule and Apartheid, which favoured white farmers.

The two researchers maintained that they could not comment on the policies of specific countries.

The ILO report makes it clear that generating decent and productive employment opportunities is the key to reducing the number of working poor in the world. At the same time, however, the organization's director-general stressed that "promoting a fairer globalization" is another essential element in reducing poverty.

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Albion Monitor December 8, 2004 (

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