Unemployment and other employment-related problems do not occur only in times of crisis. As observed by the ILO, there was a Jobs Crisis before the financial crisis, a structural unemployment problem as a result of jobless growth in many areas of the world. Investment in infrastructure development can play an active role in employment generation, both directly and indirectly through their multiplier effect within different economic sectors:
- Demand for infrastructure investment and maintenance from developing countries amounts to US$ 900 billion p.a., public funding accounting for some 70-75%;
- Regular investments and counter-cyclical spending in infrastructure are widely used to expand demand, create and sustain jobs;
- Innovative Public Employment Programmes such as public work programmes and employment guarantee schemes complement regular investments.
Public employment programmes such as public works programmes and employment guarantee schemes (PEP/EGS) are a key tool to protect the most vulnerable against shocks and to develop at the same time local infrastructure promoting social and economic development. They form part of the recovery plans in many countries. Different challenges need to be addressed for translating existing plans into effective PEP/EGS programmes. Therefore, there is a wider case for public employment programmes as part of ongoing employment and social protection policies. This is an area of significant innovation at present, in relation to the types of work, the conditions of work – and the right to work.
The Paper will cover these issues and more, straddling the range of options from public works programmes to employment guarantees, and providing policy insights and practical design tools to inform decision making at policy and programme level. They have benefited from Mr. Maikel Lieuw-Kie Song and Dr. Kate Philip's extensive experience as the Chief Director with the Department of Public Works in South Africa and as Head of a strategy development process on economic marginalization for the South African Presidency respectively, and from inputs from the ILO Global EIIP Team, in particular Marja Kuiper, Mito Tsukamoto, and Marc Van Imschoot from the Employment Sector, other ILO experts, in particular, Philippe Marcadent, from Social Protection and Steven Miller from the Economists for Full Employment Network.
“People don't eat in the long run, they eat every day”
The current economic crisis and especially its employment effects have once again brought the role of the state in employment creation strongly to the forefront. As employment provided by the private sector has shrunk dramatically, adding to an already growing employment challenge, it is increasingly recognised that the State needs to play a much more active role in employment generation. This does not only imply looking at its overall employment policy and strategy and at its role in creating an enabling environment for employment creation by the private sector, but also at the role of the State in the direct creation of employment.
The G20 leaders attending London Summit in April 2009 recognized the human dimension of the crisis and committed themselves to “support those affected by the crisis by creating employment opportunities and through income support measures” and “to build a fair and family-friendly labour market for both women and men”, through measures such as “active labour market policies”.6 The ILO Summit on the Global Jobs Crisis stressed the importance of targeted employment programmes as a response to the economic crisis. This was substantiated through the country assessments that were carried out for the G20.