Global Economy
Only one quarter of workers worldwide have stable employment contracts
By Michael Hennigan, Finfacts founder and editor
May 20, 2015 - 9:13 AM

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Only one quarter of workers worldwide is estimated to have stable employment contracts, according to a new report by the International Labour Organization (ILO).

The World Employment and Social Outlook 2015 (WESO) finds that, among countries with available data (covering 180 countries and 84% the global workforce), three quarters of workers are employed on temporary or short-term contracts, in informal jobs often without any contract, under own-account arrangements or in unpaid family jobs.

Over 60% of all workers lack any kind of employment contract, with most of them engaged in own-account* or contributing family work in the developing world. However, even among wage and salaried workers, less than half (42%) are working on a permanent contract.

The first edition of the new, annual flagship report, entitled The Changing Nature of Jobs, shows that while wage and salaried work is growing worldwide, it still accounts for only half of global employment, with wide variations across regions. For example, in the developed economies and Central and South-Eastern Europe, around eight in ten workers are employees, whereas in South Asia and Sub-Saharan Africa the figure is closer to two in ten. The rest were self-employed or engaged in family jobs.

The report also finds that despite the positive steps made towards improving pension coverage, social protection, such as unemployment benefits, is still mainly available only for regular employees.

Another current trend is the rise in part-time employment, especially among women. In the majority of countries with available information, part-time jobs outpaced gains in full-time jobs between 2009 and 2013. At the same time, many of the world's workers find themselves in dire poverty, with nearly a quarter of them last year living with their families on less than $2 a day.

"The ILO says these new figures point to an increasingly diversified world of work. In some cases, non-standard forms of work can help people get a foothold into the job market. But these emerging trends are also a reflection of the widespread insecurity that’s affecting many workers worldwide today,” said Guy Ryder, ILO director-general.

"The shift we’re seeing from the traditional employment relationship to more non-standard forms of employment is in many cases associated with the rise in inequality and poverty rates in many countries,” added Ryder. "What’s more, these trends risk perpetuating the vicious circle of weak global demand and slow job creation that has characterized the global economy and many labour markets throughout the post-crisis period.”

Ryder called on governments worldwide to design policies geared towards boosting job creation and productivity, while ensuring adequate income security to all types of workers, not just those on stable contracts.

Global employment growth has meanwhile stalled at around 1.4% annually since 2011, down from 1.7% on average between 2000 and 2007, the report said.

*An own-account worker is self-employed, potentially with one or more partners, and has no employees on a continuous basis.

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