Slow-Growing World Economy Not Generating Enough Jobs
Press release from the issuing company
Dec. 2, 2003 -- The $35-trillion world economy is not growing fast enough to provide jobs for millions of people who want them, according to a new analysis by The Conference Board.
Half of the current 2-3% average annual economic growth in the global economy is needed to provide employment for the 40 million people flooding the world’s job markets each year. But the global economy is not expanding fast enough to absorb the emerging work force. “There is simply not enough growth to go around,” says Gail Fosler, Chief Economist of The Conference Board and author of the analysis.
World economic growth rates have slowed sharply since the 1960s, with growth rates falling in not just the U.S. but in Europe, Latin America, the Middle East and Africa. Only East Asia and South Asia recorded stronger growth during the last decade than in the 1960s. “It is startling,” says Fosler, “to think that what was viewed as the boom times of the 1990s was actually the slowest-growing decade in the world economy in the past 40 years.”
A Troubling Job Outlook
The Conference Board analysis says the severely underperforming global economy raises widespread economic, political and social questions. Fosler declares: “The world economy is not made up of six or eight or even 20 advanced economies, but a widening pool of ready workers in almost 200 countries, workers who have the same aspirations that workers in the wealthy countries do. At current growth rates, not only are tens of millions of these workers going to remain unemployed, but the ones who get jobs are going to put increasing pressure on living standards in higher-income countries.”
Virtually all of the labor force growth is in emerging countries, especially in the Middle East, North Africa, South Asia and sub-Saharan Africa. While labor force growth has slowed slightly in Asia, this region is still posting faster growth than Europe and Japan.
“Among the advanced countries,” says Fosler, “only the United States has been able to maintain its labor force growth, although about one half of the new labor force entrants in the U.S. are foreign-born.”
The critical questions in a slow-growth world do not revolve around how to distribute economic growth or how to keep some nations from advancing too fast. “The real question is how everyone can advance faster together,” notes Fosler. “Unfortunately, the issue of how to achieve higher sustainable world growth is still not being asked.”
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