We can expect to see the continuing fetishisation of economic growth at the G20 this weekend, but thats not the magic potion when it comes to employment, writes Anthony DCosta. The recent uptick in the US economy has sent positive vibes around the world, signalling perhaps that global sluggishness is on its way out. Yet the positive jobs numbers accompanying that growth belie a reality that is far more grim than realised. Much of the increase in employment has been in the low-wage services sector, mainly retail business, suggesting an economic softness that almost seems like quicksand. The G20 leaders are bent on raising the global economic growth rate to 2 per cent or more than current projections. The economic logic behind this mysterious number is an unspecified investment commitment and reforms that collectively would induce economic growth and get the world economy moving again. The question is, will it get the economy moving again in terms of jobs? In fact, there is no explicit discussion by the G20 on the employment challenges that confront the world economy. The presumption is that growth means employment. That might have once been true, but it is less so these days because of globalisation. The adage whats good for General Motors is good for America is not necessarily true anymore, since investment in China may not employ American workers, but would fatten shareholder earnings. Of course, Chinese workers could buy more American products, but witness the US trade balance with China - it has persistently been negative. And as the recent growth improvement suggests, growth does not ensure quality jobs. The 20 largest economies do have global clout, but that influence comes in many shades, with different levels of economic standing. However, all of them suffer, albeit differently, from not having enough quality jobs. It is not an exaggeration to say that labor markets in the neo-liberal era have changed substantially. Good paying, permanent jobs with decent benefits are fewer in an era of contract, temporary, and part-time jobs. This is the case for most OECD countries. Even Japan, home to lifetime employment, suffers from an increasing number of people who are not in employment, education or training (NEETO). South Korea, successful in creating plenty of labour-using jobs during the heyday of export industrialisation, is now faced with a slow-growing economy and increasing share of contract and temporary workers. There is a lot riding on the G20, but the sole emphasis on growth and a loud silence on the jobs question sounds jarring. Indias newly-elected prime minister, Narendra Modi, has created waves, not just in India but everywhere he has visited. Many in the G20 in Brisbane expect that India might help pull the global economy from its slumber. He has said the right things in getting the Indian economy on track and has wooed investors to make in India. The question is, can he deliver? Even if he were to do so, one might recall that in 2004, the BJP (Mr Modis party) got thrown out precisely because the vast majority in India did not benefit from high growth under BJPs India shining era. Growth, it seems, is not the entire battle. The picture is quite grim when it comes to employment patterns in India. The bulk of Indias employment (over 86 per cent) is in the unorganised (informal) sector where much of the work is casual work and self-employment. There are many unorganised enterprises that have no legal standing, have low productivity, often use family labor, and include contract, temporary, and part-time workers. If Indias workforce is to increase by 125 million in the next 10 years as predicted by The Economist, the challenges for any government are formidable. In fact, jobless growth is no longer an anomaly, but is increasingly routine even in poor countries such as India, with only a relatively small number of jobs created in manufacturing and IT. On average, 60 per cent of the jobs in urban India are self-employment and casual labor. The jobs challenge is real, whether in the US or in India, although they have different structural origins and so their solutions are likely to be different. Nevertheless, what they share is the fetishisation of economic growth in this neo-liberal era, as if that were the magic potion for redemption. Investment is no doubt needed, which hopefully will raise growth and generate jobs, and as China falters India could pick up the slack. But can the world economy accommodate another China? What might it mean for climate change? If the recent growth experience is any guide, inequality at home and globally has become pronounced. If growth is not the answer, why isnt the G20 vocal on the jobs issue - and by extension - inequality? This article was first published by G20Watch.edu.au. View the original article here. Professor Anthony DCosta is chair of contemporary Indian studies at the Australia India Institute, University of Melbourne. View his full profile here.
Posted on: Sun, 16 Nov 2014 02:33:45 +0000
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