In the past few days, I’ve had a chance to talk to some of the leaders who thronged Davos for the annual World Economic Forum.
Some were upbeat over the global economic recovery – however tepid – but I also heard a lot of concern over growing inequality, rising unemployment and the bleak outlook for young people.
And there is indeed cause for concern. When we talk about an exit from the crisis, let’s not forget those left out by the recovery, let’s bear in mind that for over 200 million people, the crisis ends only when they get a job.
Yes, profits are back in many sectors, which is obviously great news for the private sector and should be good for the economy. But in many cases, these profits are going into asset markets rather than being put to work and creating decent jobs.
What that boils down to is a very glum outlook for jobseekers around the world: unemployment is rising, particularly among young people, not enough jobs are being created to cope with the demands of a rising world population, and improvements in working poverty have stalled.
As they leave the Swiss resort, the leaders who attended the summit need to focus on those who were not in Davos, the jobseekers who need work, the workers who need decent wages and the businesses that need an enabling environment, such as access to credit.
CEOs I talked to at the summit largely consider that the crisis is behind us, but that there still is a major hangover: youth unemployment. They are volunteering their companies to fight the good fight against youth unemployment, and that’s very encouraging.
The cost of doing nothing would be huge. As millions more people join the ranks of the unemployed, this can only increase frustration and often anger among jobseekers. Add to that the fact that wages are stagnant and inequalities growing, and we have a potentially explosive situation.
This is not a new issue. The ILO has warned for years that rising unemployment and income disparity threaten to reverse the gains of globalization. And for the third year in a row, a World Economic Forum survey ranked income disparity as a top risk facing the global economy.
Governments must do more to speed up employment creation, to support enterprises that create jobs and to end the uncertainty that leaves employers reluctant to invest in jobs. At the same time, we must allow wages to catch up – this can happen through minimum wage setting and collective bargaining.
It also means companies should pump some of their profits into productive investments rather than share buy-backs.
When I was here last year, there was a lot of talk on the need to solidify the economic recovery. We seem to have moved forward on that front. But when it comes to fighting unemployment and inequality, we are still lagging behind.
The jobs issue is the gorilla in the Davos living room. You can’t ignore it, and as much as one may be tempted to tip-toe around it, we need to tackle it head on. Or it just won’t go away.