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1 Young hit hardest in global joblessness (Katie Allen in The Guardian) The world could face years of jobless economic recovery, with young people set to be hit hardest as global unemployment continues to rise this year, a report from the International Labour Organisation warns. As the World Economic Forum kicks off in Davos with a focus on growing inequality, the ILO has highlighted a “potentially dangerous gap between profits and people”.
The UN agency forecasts millions more people will join the ranks of the unemployed as companies choose to increase payouts to shareholders rather than invest their burgeoning profits in new workers. The ILO’s Global Employment Trends report forecasts that world unemployment will rise to 6.1% this year from 6% in 2013 and will remain well above its pre-crisis rate of 5.5% for several years.
It puts the youth unemployment rate at 13.1%, more than double that for the whole workforce and almost three times the adult rate of 4.6% – a record for the ratio of youth to adult unemployment. The ILO said 5 million more people became unemployed last year, taking the global total to 202 million. That is forecast to rise to 215 million jobseekers by 2018 as employment growth, at 40 million net new jobs a year, fails to keep pace with the 42.6 million people expected to enter the labour market every year.
The ILO said emerging economies would continue to enjoy the lowest combined unemployment rate this year. It forecasts a jobless rate of 5.1% for the emerging economy members of the G20 group of nations, compared with 8.4% for the advanced economy members. But it notes that growth in emerging markets has slowed markedly in the past two years.
2 Top 85 as rich as poorest 3.5bn (Graeme Wearden in The Guardian) The world’s wealthiest people aren’t known for travelling by bus, but if they fancied a change of scene then the richest 85 people on the globe – who between them control as much wealth as the poorest half of the global population put together – could squeeze onto a single double-decker.
A new report from Oxfam warned that those richest 85 people across the globe share a combined wealth of £1tn, as much as the poorest 3.5 billion of the world’s population. The wealth of the 1% richest people in the world amounts to $110tn (£60.88tn), or 65 times as much as the poorest half of the world, added the development charity, which fears this concentration of economic resources is threatening political stability and driving up social tensions.
Oxfam called on attendees at this week’s World Economic Forum to take a personal pledge to tackle the problem by refraining from dodging taxes or using their wealth to seek political favours. Polling for Oxfam’s report found people in countries around the world believe that the rich have too much influence over the direction their country is heading.
3 ‘Implosion of the Obama phenomenon’ (Tom Switzer in Sydney Morning Herald) The Obama phenomenon has imploded. Expectations were absurdly high five years ago, when Barack Obama was inaugurated 44th president of the US. Today, however, Americans are bemused by how it all went wrong. The Economist reflected the conventional wisdom a few weeks ago in its cover story with an image of Obama sinking. The headline: “The man who used to walk on water.”
The US economy remains sluggish; the national debt is breathtakingly high and the vacillation and ineptitude over Syria has damaged US credibility and prestige. And Obama’s signature policy, the Affordable Care Act, otherwise known as “Obamacare”, is turning into his own carbon tax at home. The President’s approval ratings have crashed to below 40 per cent, his lowest ever, and a majority of people think he is untrustworthy. It was not supposed to be like this, but the fact that it is calls for some explanation.
Republicans control only half of one branch of government. They cannot be blamed for Obama’s big spending and interventionist policies, which have made the US a more regulated society, stifling initiative and discouraging work. A persuasive explanation for the US’s angst might be found elsewhere. This is that the backlash against Washington has less to do with ideological overreach of either Obama or his opponents and more to do with a crisis of confidence that stems from expectations about America’s future that no president or Congress can meet.
But events and circumstances from recent times – Iraq, Afghanistan, political scandals, deficits, debt, sub-prime mortgage crisis, diminishing net wealth, the decline of US global pre-eminence and the rise of a more pluralistic world (especially China’s economic success and influence) – has undermined the confidence of the sole remaining superpower. Many Americans are in an increasingly foul mood: polls consistently detect a widespread sense that the nation is heading in the wrong direction.
If US leaders do not prepare the nation to come to grips with a sense of limits abroad, and reorder priorities in favour of domestic affairs, they risk leaving themselves open to sad surprise in an era where not every option is available and resources are not unlimited. Despair and frustration could continue to aggravate political sensitivities. To the extent that this is true, Obama’s problems are a symptom of America’s crisis of confidence, not its cause.