Economic crisis to put more women out of work this year

A further 22 million women could fall into unemployment this year as a result of the current global economic crisis, the International Labour Office (ILO) has predicted.

Kanaga Raja

IN its annual Global Employment Trends for Women report, released on 5 March, the ILO warned that the global jobs crisis is expected to worsen sharply with the deepening of the recession in 2009.

At the same time, said the ILO, the global economic crisis would place new hurdles in the path toward sustainable and socially equitable growth, making decent work for women increasingly more difficult. It called for 'creative solutions' to address the gender gap.

The ILO is the permanent secretariat of the International Labour Organisation.

The ILO report found that of the three billion people employed around the world in 2008, 1.2 billion were women (40.4%). It said that in 2009, the global unemployment rate for women could reach 7.4%, compared to 7.0% for men.

The report said that the gender impact of the economic crisis in terms of unemployment rates is expected to be more detrimental for females than for males in most regions of the world and most clearly in Latin America and the Caribbean. The only regions where unemployment rates are expected to be less detrimental for women are East Asia, the developed economies and the non-EU South Eastern Europe and Commonwealth of Independent States, which had narrower gender gaps in terms of job opportunities prior to the current economic crisis.

'Gender inequality in the world of work has long been with us - but it is likely that it will be exacerbated by the crisis. In times of economic upheaval, women often experience the negative consequences more rapidly and are slower to enjoy the benefits of recovery,' said ILO Director-General Juan Somavia in a message for International Women's Day, commemorated by the ILO on 6 March. 'And already before the crisis, the majority of working women were in the informal economy with lower earnings and less social protection,' he added.

Deterioration in labour markets

According to the report, the labour market projections for 2009 show a deterioration in global labour markets for both women and men. To construct its scenarios, the ILO used as the basis the revised economic outlook published by the International Monetary Fund in January 2009, which projected global economic growth for this year at 0.5%.

The report presents three scenarios for labour markets in developed and developing economies, focusing on gender differences in the impact of the economic crisis.

Based on current labour market trends, the first scenario would mean that the global unemployment rate may rise to 6.5% for women in 2009 and to 6.1% for men. Out of the total number of 203 million unemployed, 86 million are women and 118 million are men. For women, this represents an increase of 10 million over the estimated number of unemployed in 2007, and for men an increase of 14 million.

The second scenario is based on the historical relationship between economic growth and unemployment at times of economic crises. In this scenario, said the ILO, the negative impact on male and female unemployment is taken in each country at the time of the largest year-on-year drop in GDP, and this relationship is used to project global and regional unemployment for 2009.

According to this second scenario, the global unemployment rate for women would rise to 7.0% and to 6.5% for men, in both cases an increase of 1.0 percentage point over 2007.

Similar to the impact on the unemployment rate for men and women combined, the largest impact on the male unemployment rate is seen in the Developed Economies and the European Union. For women, however, the largest impact on the unemployment rate is seen in Latin America and the Caribbean, reflecting both the sharp slowdown in economic growth and the severely disadvantaged position of women in labour markets in this region.

In the third scenario, the unemployment rate is projected in each country as the rate in 2008 based on the largest change in unemployment for males and females separately since 1991, taking the differences between developed economies and developing economies into account.

According to the third scenario, the global unemployment rate would rise to 7.4% for women, an increase by 1.5 percentage points over 2007, and to 7.0% for men, an increase by 1.4%.

In the Developed Economies and the European Union, the female unemployment rate would rise to 7.8%, and the male rate would rise to 7.9%. This means that according to this scenario, the gender gap in the unemployment rate would almost disappear in this region, said the report.

Vulnerable employment

The report also made projections for vulnerable employment (either contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship).

The projection of the global vulnerable employment rate according to the first scenario would result in a vulnerable employment rate for women of 51.4% in 2008, and just below 50% for men and women combined in 2008, said the report. The absolute number of people in vulnerable employment would show a decrease for both men and women, by 10 and eight million persons, respectively.

According to the first scenario, the decrease would continue in 2009, resulting in a total decrease by 11 million women and 16 million men in comparison with 2007. 'It is however expected that, in the light of recent economic developments, this trend will not materialise,' said the ILO.

In the second scenario, the vulnerable employment rate would still fall in 2009, but by only 0.4 percentage point for men. For women, the decrease would be 1.0 percentage point.

The third scenario suggests a strong rise in the proportion of both men and women in vulnerable employment in 2008 as well as 2009.

According to this scenario, the female vulnerable employment rate would rise to 54.1% in 2008, and the number of women in vulnerable employment would rise by 27 million to 654 million in 2008. For men, the corresponding proportion in 2008 would be 51.3%, or 915 million men in vulnerable employment.

In 2009, the third scenario suggests a rise of the proportion of workers in vulnerable employment to 53.0%, 'which would wipe out more than ten years in the reduction of decent work deficits as captured in the vulnerable employment rate', said the report. It noted that East Asia is the only region that would still see a reduction in the female vulnerable employment rate in this scenario, and the vulnerable employment rate for males would rise in all regions.

In all three scenarios for 2009, said the ILO, the impact on the vulnerable employment rate is stronger for men than for women at the global level; in other words, male vulnerable employment rates rise more than female rates. Latin America and the Caribbean is the only region in which in all three scenarios the opposite is true; that is, a more significant impact on vulnerable employment rate can be expected for women than for men.

Unemployment

The report noted that after four consecutive years of decreases, the global unemployment rate increased from 5.7% in 2007 to 6.0% in 2008. The ranks of the unemployed increased by 13.8 million people between 2007 and 2008, which is the largest year-on-year increase in the period for which global estimates are available. The global number of unemployed in 2008 is estimated at 193 million.

The unemployment rate for women was 6.3% in 2008, as compared to a rate of 5.9% for men. Between 2007 and 2008, the unemployment rate increased for both men (0.4 percentage point) and women (0.3 percentage point), thus slightly reducing the gender gap in unemployment rates that has been seen in the past decade.

In terms of numbers of unemployed, 112 million out of the total of 193 million are men, and 81 million are women, said the ILO.

The report underscored that even though global male and female labour force participation rates show signs of conversion, the gap is narrowing at a very slow pace and it still amounted to almost 25 percentage points in 2008. Women made up 40.5% of the global labour force in 2008, up from 39.9% in 1998.

'It is clear that, despite the progress made in many regions, far fewer women participate in labour markets than men.'

In developed economies, part of the gender gaps in participation and employment can be attributed to the fact that some women freely choose to stay at home and can afford not to enter the labour market. Yet in some developing regions of the world, remaining outside of the labour force is not a choice for the majority of women but an obligation; it is likely that women would opt to work in these regions if it became socially acceptable to do so.

This of course does not mean that these women remain at home doing nothing; most are heavily engaged in household activities and unpaid family care responsibilities. Regardless, because most female household work continues to be classified as non-economic activity, the women who are thus occupied are classified as outside of the labour force, said the report.

The ILO also drew attention to gender inequality in sectoral employment. It found that only a small proportion of employed women are working in industry (18.3% in 2008, as compared to 26.6% of men); the large majority are in agriculture and, increasingly, in the services sector. The services sector accounted for 46.3% of all female employment in 2008, as compared to 41.2% of male employment. Overall, women are still over-represented in the agricultural sector. Globally, the share of women employed in agriculture stands at 35.4%, as compared to 32.2% for men.

Gender pay gap

The report also highlighted the gap in wages earned by women and those earned by men. It said that recent analyses of labour markets in Europe and Central Asia reached the conclusion that although the reduction of the gender pay gap is a major political objective for governments and social partners, progress remains slow and the situation has even deteriorated in certain countries.

In 2007, the European Commission noted that one of the consequences of the differences and inequalities which women face on the labour market is the persistent gender pay gap. Women earn an average of 15% less than men for every hour worked. In the United States, several studies of the National Committee on Pay Equity show that wage gaps continue to exist there and that the wage gap has been closing at a very slow rate.

Throughout most regions and many occupations, women are paid less money than men for the same job. In a majority of countries, women's wages represent between 70% and 90% of men's wages, with even lower ratios in some Asian and Latin American countries, said the ILO report.

A similar trend in the wage gap was also highlighted by a new report released by the International Trade Union Confederation (ITUC) on 5 March.

The report by the ITUC, which represents some 170 million workers in 312 affiliated national organisations from 157 countries, revealed that the pay gap between men and women worldwide may be much higher than official government figures.

The ITUC report, which is based on survey results of some 300,000 women and men in 20 countries, puts the global pay gap at up to 22%, rather than the 16.5% figure taken from official government figures and released by the ITUC last March.

This article first appeared in the South-North Development Monitor (SUNS, No. 6655, 9 March 2009).

*Third World Resurgence No. 223, March 2009, pp 47-49