The Director-General of the International Labour Organization’s (ILO), Gilbert Houngbo, told delegates at the 2022 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) to preventing scarring and protect the most vulnerable by increasing minimum wages and guaranteeing social protection benefits.
A statement from the global labour organization on Thursday quoted the Director-General as saying that these measures should be among the priority responses by global leaders to the current economic and social crisis.
Other priority policies canvassed by the ILO boss include investment in social protection and productive employment through the Global Accelerator on Obs and Socail Protection for Just Transitions, which aims to galvanize the creation of 400 million jobs, including in the green, digital and care economies, and the extension of adequate social protection to the four billion people currently without coverage.
Houngbo maintained that this would support a shift to a pro-active approach to managing economic, social and environmental crises, and the just transition required to tackle climate change.
He told the delegates: “At this challenging time, it is essential that we seize the initiative… [and] shape the future so that it delivers a better, more equitable and sustainable world that will also contribute to lasting peace.”
In his written statement to the joint World Bank-IMF Development Committee, the labour expert noted that increasing productive employment was essential to reduce inequality. Greater formalization of employment was also necessary to improve business productivity and sustainability, promote decent work, and give governments more financial resources to address poverty and inequality.
According to him, long-term policies to tackle persistent large gender gaps, including in pay, pensions and quality of work, were also needed.
Houngbo further told the committee: “Constrained by rising debt burdens and shrinking fiscal space, many countries now face [a] daunting policy landscape. A new collective effort is needed to better manage and ultimately exit these crises and prevent future crises.”
He listed these to include increasing social investment in skills development and care, addressing labour market inequalities, and raising the levels of social protection benefits and wages to maintain living standards in the face of inflation – for which there was scope without creating a wage-price spiral.
In a second written statement to the International Monetary and Finance Committee (IMFC), the Director-General described a cost-of-living crisis fuelled by higher prices and a decoupling of wage growth from productivity growth, leading to falling real wages.
He said that without immediate action and increased resources this could increase inequality and place greater strain on businesses, adding that with many countries having limited fiscal space to provide support to low-income households, this could fuel social unrest.
Houngbo highlighted the need for increased support for vulnerable economies, who may face high and increasing debt, stressing that greater respect for labour rights and the promotion of sustainable enterprises and better working conditions in supply chains could catalyse economic development, poverty reduction and greater income equality between countries.
He called for increased collective efforts to address the current interrelated and mutually reinforcing crises, pointing out that such action would also advance social justice and so contribute to lasting peace.
