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TRENDS AND CHALLENGES IN ASIA AND THE PACIFIC Sukti Dasgupta Senior Economist | ILO Regional Office for Asia and the Pacific Decent Work for All ASIAN DECENT WORK DECADE 2006-2015 Overview Key regional trends and challenges Looking forward: Areas for action Strong economic growth… Real GDP annual average growth, 2002-07 and 2008-13 (%) 14.0 CAGR 2002-07 CAGR 2008-13 12.0 10.0 8.0 6.0 4.0 2.0 0.0 -2.0 … despite deceleration post global crisis, and poor growth in advanced countries. Source: World Bank, World Development Indicators (Nov. 2014). …growing middle class… Middle class employment by Asia-Pacific subregions, 1991 and 2011 (000s & %) 600 70 60 500 50 400 40 300 30 200 20 100 10 0 0 1991 2011 East Asia 1991 2011 1991 SE Asia and Pacific Middle class, million (left axis) 2011 South Asia Middle class, % total (right axis) Note: Middle class defined as $4 and above. Source: Kapsos, S. and E. Bourmpoula: Employment and Economic Class in the Developing World, ILO Research Paper No 6 (Geneva, ILO, 2013). …but income inequality persists Income share of the top and bottom deciles, latest available year (%) 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Top decile Bottom decile … which calls for enhanced wage setting mechanisms, social dialogue and labour legislation. Source: World Bank, World Development Indicators (Nov. 2014). Mixed trends in employment growth… Employment growth, 2013-14 (000s & %) 2 000 1 750 8 Change in 000s (left axis) Change in % (right axis) 7 1 500 6 1 250 5 1 000 4 750 3 500 2 250 1 0 0 - 250 -1 - 500 -2 - 750 -3 Note: Non-seasonally adjusted; ages 15+, except Macau, China (ages 16+). Source: ILO estimates based on labour force survey data from national statistical offices. …relatively low unemployment rates… Total and youth unemployment rates, 2014 (%) Sri Lanka (Q1) Indonesia (May) Philippines (July) Australia (Oct.) New Zealand (Sep.) Taiwan, China (Sep.) Hong Kong, China (Sep.) Korea, Rep. of (Oct.) Singapore (Q2) Macau, China (Q3) Japan (Sep.) Total Viet Nam (Q2) Youth Thailand (Q2) 0.0 5.0 10.0 15.0 20.0 25.0 … but youth unemployment rates are much higher. Young people are 2 to 5 times more likely to be unemployed than adults. Note: Youth ages 15-24, except in Macau (China) (16-24) and Singapore (15-29). Source: ILO estimates based on labour force survey data from national statistical offices. …and poor job quality pervasive… Vulnerable employment rate, 2013 and 2014 (%) 70 60 50 40 30 20 10 0 Philippines (July) Sri Lanka (Q1) Thailand (Q3) 2013 Indonesia (Aug.) Viet Nam (Q3) 2014 … with high incidence of vulnerable employment. Note: Vulnerable employment is defined as own-account and contributing family workers. Source: ILO estimates based on labour force survey data from national statistical offices. …agricultural employment still high… Agriculture as a share of total employment, latest available year (%) 90 80 70 60 50 40 30 20 10 0 Source: ILO: KILM, 8th Edition. …informality is a challenge… Informal employment as a share of non-agricultural employment, latest available year (%) Nepal India Pakistan Indonesia Philippines Viet Nam Sri Lanka Thailand China 0 20 40 60 80 100 …indicating poor working conditions, with limited job security, legal and social protection and representation. Note: Indonesia includes only Banten and Yogyakarta; Sri Lanka excludes the Northern Province; China covers six urban areas. Source: ILO: Statistical update on employment in the informal economy (Geneva, June 2012); National statistical offices. …persistent working poverty… Working poverty and share of total employment (million & %) 600 90 80 500 70 400 60 50 300 40 200 30 20 100 10 0 0 1991 2014 East Asia 1991 2014 South-East Asia and the Pacific Total working poor in millions (left axis) 1991 2014 South Asia Share of working poor in total employment, in % (right axis) … with many workers living on less than $2 per day. Note: Working poverty defined as workers living on less than $2 per day. Source: October 2013p update of the model in: Kapsos, S. and E. Bourmpoula (2013p). Employment and Economic Class in the Developing World. ILO Research Paper No 6; ILO - Trends Econometric Models, October 2013p. …gender disparities widespread… Labour force participation rates, latest available year (%) 80 60 40 20 0 Male-female gap (percentage points) Female LFPR (%) …regarding participation, equal pay and access to wage employment, among others. Source: National statistical offices; ILO: KILM, 8th Edition. …and wages remain low… Average monthly wages, latest year available (US$) 5,500 5,000 4,642 4,500 4,000 3,694 3,320 3,500 3,419 2,841 3,000 2,500 2,000 1,780 1,500 1,000 500 73 119 121 174 183 197 215 391 411 565 613 651 0 … with wide intra-regional differences, and minimum wages the main wage setting mechanism, but challenges in rationalization and robust mechanisms for wage setting. Note: Hong Kong (China) and Japan refer to full-time employees. Source: ILO Global Wage Datatase 2014/15, based on national statistics. …low ratification of Conventions… Freedom of association C087 Asia and the Pacific (34) World (185) Forced labour C098 C029 Discrimination C105 C100 C111 Child labour C138 Ratification rate C182 18 21 27 23 28 24 23 30 71% 153 164 177 174 171 172 167 179 91% …economic progress not matched by social progress and labour market institutions…. Source: ILO: Normlex. …mixed labour force trends… Projected labour force growth, 2010-15, 2015-20, and 2020-25 (per cent) 16 2010-15 2015-20 2020-25 14 12 10 8 6 4 2 0 -2 Thailand Singapore Viet Nam Myanmar Brunei Malaysia Darussalam Indonesia Cambodia Philippines Lao PDR ASEAN …while the labour force will expand significantly in some countries, others face ageing societies, factor spurring migration in the region, with large segments undocumented. Source: official national sources; ILO: Estimates and Projections of the Economically Active Population (EAPEP), Jan. 2014; ILO: ILOstat database. In South East Asia, AEC 2015 Will create new opportunities But could also aggravate inequalities and vulnerabilities The free mobility of skilled workers likely to have little impact, while increased migration of low and medium skilled likely, Urgent policy action required to prepare labour markets for AEC, and to protect migrant workers. In a nutshell, challenges include: Inequality, wages, and labour market institutions Gender equality Social protection Labour migration and regional integration Large informal segments that are not organized Low ratification rates of core conventions Incomplete and irregular regional labour market information system Overview Key regional trends and challenges Looking forward: Areas for action Concerted action is needed Promote shared prosperity Manage structural change Greater tripartite dialogue Manage structural change Industrial and sectoral policies Education and training Social protection Small and medium enterprises Investing in infrastructure Promote shared prosperity Strengthening productivity-wage link Improving opportunities for better quality jobs Promoting gender equality Protecting migrant workers Greater cooperation and dialogue Improving labour market information Tripartite dialogue THANK YOU Sukti Dasgupta ILO Regional Office for Asia and the Pacific Decent Work for All ASIAN DECENT WORK DECADE 2006-2015