Global Growth Is At Virtual Halt

by Dollars and Sense

Around the world, a bleak jobs picture

Jobs are drying up around the world as the global economy enters its first overall downturn since the Great Depression, provoking social unrest in Europe and Asia along with calls to protect local workers from foreign competition.

From lawyers in Paris to kitchen workers in Taiwan and bodyguards in Colombia, the ranks of the jobless are swelling rapidly as even once fast-growing economies fall victim to a cascading global slowdown that has already claimed 3.6 million American jobs and millions more elsewhere.

From December 2007, when the recession began in the United States, to the end of 2009, worldwide job losses could hit a staggering 50 million, according to the International Labor Organization, a United Nations agency based in Geneva.

High unemployment rates, especially among the youngest in the work force, have led to riots in Latvia, Lithuania, Greece and Bulgaria and contributed to major protests in Britain and France.

Meanwhile, as in Washington, stimulus packages elsewhere include protections for domestic companies, increasing the likelihood of protectionist trade battles.

"Nearly everybody has been caught by surprise at the speed in which unemployment is increasing, and are groping for a response," said Nicolas Véron, a fellow at Bruegel, a research center in Brussels that focuses on Europe's place in the global economy. "Until fairly recently, unemployment was not the biggest issue in Europe but it is now No. 1 and it will dominate the agenda."

While the number of jobs in the United States has been falling since the end of 2007, layoffs in Europe, Asia and the developing world have caught up only recently as companies that resisted deep cuts in the past follow the lead of their American counterparts.

"This is the worst we've had since 1929," said Laurent Wauquiez, France's employment minister. "The thing that is new is that it is global, and we are always talking about that. It is in every country, and it makes the whole difference."

According to the International Monetary Fund, global growth has come to "a virtual halt," with developed economies expected to shrink by 2 percent in 2009, the worst performance since the 1930s. Many other experts predict that worldwide economic activity will actually fall this year.

Labels: financial crisis, full employment, growth, recession

Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!).
2/15/2009 12:50:00 PM