38 TRADE & FINANCE
ILO DIRECTOR GENERAL
GUY RYDER’S REMARKS
AT THE JOINT MEETING
OF G20 FINANCE &
LABOUR MINISTERS
SEPT 4TH 2015
Guy Ryder, Director General, ILO
Thank you, Chair. Ministers, the initiative to hold
this joint session is most timely for three main
reasons.
First, growth has disappointed for a number of years and has continued to
disappoint since G20 Leaders adopted their Brisbane goal of increasing
growth by more than 2 per cent above trend projections by 2018.
Continued cyclical weaknesses in demand are now interacting with
weak investment and productivity growth and threatening to transform
short-term problems into long-term ones. High unemployment and
under-employment, coupled with stagnant wages in many G20 countries
are major factors contributing to the weakness in global demand, which
further discourages private investment in the real economy, despite
extraordinarily low interest rates.
The report before you by the International Organizations paints a worrying
picture of persistently weak employment performance across most G20
countries. Furthermore it finds that the problem is not “jobless growth”—in
fact there has been little change in the overall employment intensity of growth
in the G20—but rather that there has simply not been enough growth.
Secondly, rising inequality and a reduced labour income share in many
countries is increasingly recognized as a factor contributing to weak
economic growth. Labour market developments are an important driver
of inequality trends, along with tax, transfer and education policies, and
this points policy-makers to focus on how labour market policies can be
coordinated with more traditional fiscal measures to accelerate growth and
to reduce inequality.
Thirdly, output growth and employment growth are mutually dependent
and they tend to be mutually reinforcing—in either positive or negative
directions, producing virtuous or, if not counteracted, vicious circles.
A country-specific, comprehensive and multifaceted approach is
required that simultaneously addresses deficits in demand, starting at
the household consumption and investment levels, as well as supply
constraints. While country circumstances clearly differ, there is sufficient
common ground in the challenges and possible responses to make G20
coordination potentially very productive.