UN labour arm denounces austerity measures

UN's International Labour Organisation says austerity measures brought on by governments have hurt the world's poorest.

Last updated: 03 Jun 2014 00:49
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As many as 123 million people in the European Union - a quarter of the population - are now classified as poor [AFP]

The United Nation's labour agency has denounced "premature" austerity measures brought in by governments around the world during the financial crisis, saying they have hurt the world's most vulnerable people.

Isabel Ortiz, director of social welfare of the International Labour Organisation (ILO), said on Tuesday that in 2014 alone at least 122 governments cut public spending, including in 82 developing countries.

In the European Union, where many states brought in severe budget cuts in response to the debt crisis, she estimated that as many as 123 million people - or a quarter of the bloc's population - were now classified as poor because of cuts in social protection.

Now, more than 70 percent of the world's population was not adequately covered by social protection, the ILO said.

But China, the world's second-largest economy, has almost succeeded in rolling out universal pension coverage and has increased the wages of its lowest-paid workers.

In 'time of most need'

Cuts to "pensions, the health system and social security... the removal of subsidies, downsizing among social workers and health personnel" hit poor people at a time when they were most in need of support, she said.

People also had to pay the cost "at a time when jobs are scarce and support is more necessary than ever".

Between 2008 and 2009, at least 48 developed countries implemented stimulus packages worth $2.4bn, of which about one quarter was spent on measures for social protection.

These "acted as an automatic stabiliser that helped economies to regain their balance and protect the unemployed and the most vulnerable from economic disaster," the ILO said.

But from 2010, many governments changed tack and took what the ILO said were "premature fiscal consolidation measures" despite the need to stabilise consumption and support the poor.

"Most people do not have adequate social protection when it is most needed," said ILO deputy director general Sandra Polaski.

Almost four out of 10 people worldwide don't have access to a healthcare system, while in poor countries that rises to nine out of 10.

Globally, only 12 percent of the unemployed receive benefits, ranging from almost two-thirds in Western Europe to less than three percent in the Middle East and Africa.

Meanwhile, the ageing population in developed countries mean many retirees live below the poverty line. In at least 14 European countries, pensions for future retirees are expected to fall.

Faced with this situation, the ILO called for social spending to be "high on the development post-2015 agenda".

"The rationale for social protection is even more undeniable in this period of economic uncertainty, low growth and growing inequality," Polaski said.


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