Global labour markets: no recovery in sight

The smashing impact of financial crisis is felt diversely across the globe. Besides shadowing the economic growth with varying degree of recessional impact, the lingering global crisis shaped major negative repercussions for the labour markets across the world, thus producing multiplier effects on economic activity.
The impact of financial crisis on labour market is usually analyzed through the lens of unemployment which surged from less than six percent to over eight percent of the labour force since 2008, bringing the total number of unemployed to over 200 million. The 29 million net jobs lost during the global economic crisis have not yet recovered. The Euro crisis coupled with the "fiscal cliff" threat in the United States, produced downside risks to growth. The IMFs downgrade of global GDP growth for 2013, from 3.8 to 3.6 percent, has led the ILO to estimate that an additional 2.5 million jobs could be lost in 2013.
Among the unemployed lot, those aged 15-24 peak the list, standing at 75 million in 2012, an increase of four million since 2007. However, employment and unemployment numbers don tell the full tale.
Over the years, another pinching issue that has fetched considerable attention is the mounting inequality in income distribution whereby the workers share is decreasing while the capital share of income is increasing in majority of countries. Shrinkage in labour share hurts household consumption, leading to strained aggregate demand.
This is sometimes counterbalanced by increasing the net exports; however, this is not a viable solution as all the countries may not produce current account surplus at the same time.
The underlying reasons to this drop in labour share are technological progress, trade globalisation, growth of financial markets, and diminishing union density, which have eroded the bargaining power of labour. Financial globalisation also, has played a significant role.
It is a widely observed phenomenon that when wages rise in line with productivity increase, both are sustainable and create a stimulus for further economic activity by spurring households purchasing power. However, for a decade or more, the link between wages and labour productivity is conked out in many countries resulting in global economic imbalances.
For the last four years, albeit the growth in real monthly wage is positive but the growth rates have declined significantly compared to the pre-crisis levels. Another striking factor to quote here is that China, because of its large share in the global pie, in terms of number of wage-earners and its unusually high rate of economic growth, is the major force propelling the wage growth numbers. Removing China from the calculation significantly reduces the global wage growth rates.
The global financial crisis has also resulted in uneven income distribution whereby the gap between the top 10 percent and the bottom 10 percent of wage earners has increased considerably.
From 2002 to 2007, the gender gap in unemployment was constant at 0.5 percent; however the crisis widened this gap to over 0.7 percent in 2012. More than 13 million women lost their jobs since 2007 with no significant diminution in unemployment rates expected by 2017.
All the aforementioned issues are fuelling social unrest across the globe. Although economic growth is resumed in some parts of the world, the labour market still yearns for improvement. According to ILO, the world still requires to create 50 million jobs to return to the pre-crisis level; however fiscal austerity and tough labour market reforms overawe the scenario for a true labour market recovery.