The world is in the midst of a global job crisis that could last up to eight years, the head of the United Nations labour agency said Wednesday.

With some 45 million people entering the work force each year, the world needs to create 300 million news jobs by 2015 only to ensure that unemployment rates remain stable, said Juan Somavia, chief of the International Labor Organisation (ILO).

"But things are going in the opposite direction," Somavia told the 183-nation body's annual assembly of government officials, employer groups and labor unions.

Somavia said the global economy would contract by 1.3 per cent this year and that unemployment was likely to rise through 2010, and maybe 2011. Bankruptcies are increasing "exponentially", poverty is rising and middle classes are weakening, he said.

The Chilean diplomat who has headed ILO since 1999 has been urging governments to address joblessness and welfare in addition to their stimulus packages that have focused on rescuing banks and failing manufacturers.

The Group of 20 rich and emerging economies has taken bold moves to stem the downfall in the world economy, Somavia said, but he warned that employment tends to recover in a crisis after only four to five years.

In this case, "the world may be looking at a jobs and social protection crisis of six to eight years' duration," he warned.

"Putting people first, not just saying it but doing it, has to be the priority," Somavia added.

- AP

Taken from the Financial Gleaner, Friday June 5, 2009.