Employment statistics are essential in measuring the growth of an economy. While recent indicators have suggested that China may be rebounding strongly and the U.S. may successfully hold off another recession, the United Nation’s International Labour Organization has announced that global unemployment statistics rose throughout 2012.
The global unemployment rate now currently rests at 6 percent, in actual figures some 197 million are unemployed. This marked an increase of 4 million people as the global economy struggles to absorb both the new entrance to the work force and staving out economic decline amidst numerous economic conditions in various countries around the world.
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Further, the ILO is now projecting unemployment to rise by another 5 million in 2013. As unemployment rates rise, consumer income tends to drop which puts pressure on markets across the world. With economies around the world already struggling to maintain growth, increasing unemployment could destabilize vulnerable countries and regions, such as the European Union.
The continued rise in unemployment rates is also coming at a time when social benefits across the world are being slashed. In the United Kingdom, United States, and elsewhere college tuition rates have grown at double digit rates in recent years. In countries such as Greece, decades old social welfare programs are now seeing massive funding cuts as austerity has become the policy of the day.
Perhaps most worrisome, the unemployment rate among people under the age of 24 stands at a shocking 13 percent. This could result in a so-called lost generation, leaving millions of young adults to struggle to find work and earn a sustainable income. Additionally, younger individuals are almost always among the most vocal in fueling protests and revolutions. With so many governments already under fire, such a high young-adult unemployment rate will only add to the tensions.
With many governments around the world suffering from high debt levels the age old remedy of government stimulus plans may prove difficult to carry out. Years of misspending and investments from countries ranging from China to the United States and Great Britain have left many governments buried in debt and weary of launching new stimulus plans. This has left many public policy makers wonder what the next step is.
Encouraging the private sector to grow and thus employ more people is the long-sought holy grail. With the exception of Asia, however, many nations are seeing their private companies posting only moderate growth and hirings, at best. Headlines have also been filled with companies slashing their workforces. FedEx Corporation (NYSE:FDX), for example, announced plans in December to reduce its annual operating costs by 1.7 billion dollars, with workforce reductions being the major component of the cuts.
Going forward politicians, business leaders, and policy makers will have to work hard to figure out new ways to spur growth, or else risk the backlash of increasingly dissatisfied peoples. Many analysts have suggested that the Arab Spring was largely fueled by unemployed young-adults, suggesting that an unemployed society can exert a tremendous amount of influence.