ILO says austerity budgets aren't working

April 30, 2012 at 4:10 PM
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GENEVA, Switzerland, April 30 (UPI) -- The International Labor Organization in Geneva, Switzerland, said putting budget reform ahead of economic improvement has backfired around the world.

"Fiscal austerity combined with labor market deregulation will not promote employment prospects in the short term. In general, there is no clear link between labor market reforms and higher employment levels," said an ILO report released Monday.

The group's "World of Work Report 2012: Better Jobs for a Better Economy," says there are 50 million fewer jobs now compared to before the global economic crisis that began in 2007.

In addition, the report said, "many governments, especially in advanced economies, have shifted their priority to a combination of fiscal austerity and tough labor market reforms."

"Such measures are having a devastating effect on the labor market in general and job creation in particular," the study says.

"The narrow focus of many Eurozone countries on fiscal austerity is deepening the jobs crisis and could even lead to another recession in Europe," said Raymond Torres, director of the ILO Institute for International Labor Studies and a lead author of the report.

The report says austerity budgeting and labor reforms "especially in Europe," have combined to slow job recovery, which is now not expected before the end of 2016 "unless there is a dramatic shift in policy direction."

The report says 57 out of 106 countries showed an increase in the report's Social Unrest Index from 2010 to 2011.

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