Global Employment Trends 2014 highlights the risks of a jobless recovery. While economic activity is starting to recover in most developed and emerging economies, labor markets have not recovered from previous weaknesses and global unemployment remains at 6 percent—almost 202 million jobseekers. As joblessness persists, more unemployed workers are becoming discouraged and quitting the labor market, further widening the crisis-related jobs gap in comparison to pre-crisis trends. Insufficient private and public consumption as well as low investment prevent faster job creation and a quicker fall in the unemployment rate. Historically low interest rates, especially in advanced economies, have so far triggered a surge in financial rather than in real investment, with little effect on job creation.
This report argues that policymakers need to tackle weak aggregate demand growth through more pro-active policies that help boost private and public consumption. In addition, hiring uncertainty needs to be brought down in order to increase investment and job creation.