Decent work as path to reducing global poverty

IOE calls for addressing barriers to decent work to accelerate the pace of poverty reduction on this International Day for the Eradication of Poverty.

More than 700 million people or 10% of the world’s population still live in extreme poverty according to the United Nations. They survive on less than US$1.90 a day. Although we have seen huge and impressive progress in the eradication of poverty in the last decades, this number is still too high and demands urgent action. It is simply not acceptable that people are subject to extreme poverty and all the accompanying factors, such as food insecurity, hunger, and malnutrition.

Employment is essential to lifting people out of poverty, giving them a chance to make a living and fulfil personal aspirations and goals. Instead of combating poverty as a symptom, we need to ensure that more people find work in the formal economy. SDG 8 on employment, decent work and economic growth is critical to achieving SDG 1 on poverty reduction. Open, dynamic and inclusive labour markets are a corner stone in addressing the unemployment challenge.

Employing women and young people

Overall, women are less likely to participate in the labour force and face higher risks of vulnerable employment. World Bank research shows that 104 economies still prevent women from working in certain jobs, simply because they are women. In 18 economies, husbands can even legally prevent their wives from working. Moreover, a further underlying cause for the vulnerable position of women in the world of work is education. Young women account for 59 per cent of the total illiterate youth population globally. Tackling women’s economic empowerment and promoting equal opportunities and education is not only a matter of ensuring the human rights of one half of the world population but will have also a powerful effect on eradication extreme poverty.

It is said that a job alone is not a guarantee for a decent living. Indeed, nine out of ten young workers in low-income countries and two thirds of young workers in middle-income countries are employed informally. This cannot go unaddressed. The risks with regards to working conditions are highest in the informal sector. Furthermore, lacking contributions through taxes and into social security systems limits the ability of states to build up proper social protection systems, which contributes to extreme poverty.

Formalising informal employment

Addressing informality is the elephant in the room when searching for the silver bullet to promote development and decent work. Although the ILO adopted with Recommendation 204 an international standard to address informality, the issue has neither received sufficient attention nor seen sufficient willingness to address it properly. We will not be able to make enough progress on any of the SDGs if we don’t address the informality challenge.

Frictionless free trade as path to job creation

China accounts for a huge portion of the decline in extreme poverty over the past decades and is an example for a country that makes full use of the opportunities global trade offers for growth, development and employment creation.  A multiplicity of studies confirm the importance of international trade for productive employment and decent work particularly among the poor. However, increasing reservations against global trade and growing sentiments towards protectionism threaten to undermine not only the world trading system, but also the economic and social gains which has been achieved, particularly on the eradication of poverty.

This International Day for the Eradication of Poverty is a strong reminder that conducive labour market frameworks, equal opportunities, enabling business environments, good governance and international trade are not aims in themselves, but serve more fundamental goals, most importantly to lift people out of poverty. IOE as the international voice of business will continue to promote frameworks, rules and initiatives which tackle the root causes of poverty. We are committed to work together with all stakeholders and particularly governments for reaching the SDGs.

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