Staggering unemployment numbers: 73% of people wanting a good job are without one

The International Labour Organization (ILO) just released its estimate for global unemployment. It claims there will be more than 200 million unemployed people worldwide this year. Using what it calls the “labor force participation rate,” the ILO calculates that approximately 64% of working age people are working or looking for work.

The problem is that the labor force participation rate includes, in developing countries, subsistence-level activities such as trading a chicken for some coal, selling fruit in traffic on busy roadways, and even begging. This definition of “work” is just too broad.

Let me explain: There are 7 billion people on Earth and 5 billion of them are adults aged 15 and older. So the ILO calculates that 64% of 5 billion — or 3.2 billion of these adults — are working or want to work. That is almost exactly what the Gallup World Poll found. When we asked a sample of the 5 billion adults in the world if they wished for a “good job,” almost exactly 60%, or 3 billion, told us yes.

So the ILO and Gallup agree — up to a point. Where we diverge is our definition of “work.” Gallup does not count work that is “informal” or “self-employed” or “part time” — selling fruit in traffic, etc. — because it makes the data very messy. There is also a huge variation of informal jobs between developing countries and more developed ones, so the comparison becomes apples to oranges.

Gallup has a rigorous and precise definition of a good job: one that is at least 30 hours per week for an employer. By that definition, 60% of 5 billion adults, or 3 billion people, desire a good job — and of that 3 billion, 27% report actually having a good job.

So Gallup’s World Poll data come to a very different conclusion from the ILO: We see that 2.2 billion — or 73% of the 3 billion people who want a good job — are actually out of work, versus the ILO’s estimate of 200 million without jobs as reported by the ILO.

Put another way, the ILO reports global unemployment at 5.9%, whereas Gallup reports global unemployment of good jobs at 73%.

While wildly different, they are both accurate figures for what they claim to report. But I question the value of a single statistic that reports world unemployment at 5.9%. At best, this figure grossly understates the world’s most serious problem, which is a massive shortfall of good jobs.

Now, we at Gallup are quick to realize that we are measuring different things, and we have great respect for ILO’s statistics. But I would strongly encourage all economists, governments, and nongovernmental organizations committed to human development to factor in Gallup World Poll unemployment, or Payroll to Population rate, in their assessments of global joblessness.

I say this because the single biggest cause of a nation’s instability is hopelessness that is rooted in unemployment and underemployment. In my view, the most salient statistic in predicting a country’s social and political stability is what percentage of a nation’s adult age population is engaged in a real full-time job — in a good job. For instance, the U.S.’ good job rate (Payroll to Population) is at 41%, the same as Canada’s. Spain’s and Poland’s rates are both 33%, while Iran’s and Mali’s are an alarmingly low 9%. As goes this single metric, so goes the very existence of a country’s future.

Source: Gallup, Chairman’s Blog

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