Employment issues and the rights of the child – the Asian context

1. Employment issues and the rights of the child – the Asian context Sukti Dasgupta ILO Regional Office for Asia and the Pacific Decent Work for All ASIAN DECENT WORK DECADE 2006-2015

2. Overview • Asia’s economic growth and rising inequality • Challenges to Decent Work: Job Quality , Exclusion, Vulnerability… • The normative and policy framework to promote Decent Work and child rights • Looking Forward: Rebalancing in Asia

3. Asia – in transition… Asia a new global power – yet also the region of extreme poverty, hunger, war, violence and discriminations – and also natural disasters.. Still largely rural/agricultural – but share of agri shrinking, and services growing rapidly.. Most still labour surplus though some, such as Japan, Korea, Malaysia, Singapore facing labour shortages Still largely young, but aging becoming an issue in some countries . Working age population growing in some countries but falling in others Sends as well as receives migrants.

4. Unemployment rates are low in general but Youth Unemployment rates are much higher… Total and youth unemployment rates, most recent period (%) Note: Youth aged 15-24, except Hong Kong, China (aged 15-19); Macau, China (aged 16-24); Pakistan (aged 15-19); Singapore (Residents aged 15-29) and Viet Nam (aged 20-24). Source: National statistical offices; ILO: Key Indicators of the Labour Market, 7th Edition (Geneva, 2011). …young people 3-5 times more likely to be unemployed than adults. Also, the rate of those not in employment, education nor training (NEET) is as high as 30% in Bangladesh and the Philippines.

5. Need to go beyond unemployment statistics as vulnerability remains high, reflecting poor job quality… Share of own-account and contributing family workers in total employment (%) Source: National statistical offices; ILO: Key Indicators of the Labour Market (KILM), 7th edition; ILO: Global Employment Trends 2012. …pervasive informality and rising casual jobs contribute to precarious working conditions and limited social protection.

6. Earlier thinking that growth would shrink informality has failed to come about… Informal employment as a share of non-agricultural employment, most recent year (%) Note: Indonesia includes only Banten and Yogyakarta; Sri Lanka excludes the Northern Province; China covers six urban areas. Source: ILO: Statistical update on employment in the informal economy (Geneva, June 2012); National statistical offices. … growth has been built on low earnings, long working hours and unsafe working conditions for its women and men… also high prevalence of working children.

7. Earnings for many are still too low to escape poverty… Share of workers living in poor households, most recent period (%) Source: ILO, Key Indicators of the Labour Market (KILM), 7th edition; ILO: Global Employment Trends 2012. …as around 711million workers in Asia live in households that earn less than US$2 a day (322 million below US$1.25).

8. Significant share of children still working… Share of children in economic activity, aged 5-14, most recent period (%) Note: Aged 5-14 except Cambodia and Timor Leste (aged 10-14). Source: ILO: Accelerating action against child labour (2010); Understanding Children's Work. ….denied several child rights: Right against economic exploitation (CRC, Article 32), Right to education (CRC, Article 28) Physical and psychological wellbeing (CRC, Article 39)

9. Positive development - Labour productivity (output per worker) has grown fast, led by China… Source: Based on The Conference Board Total Economy Database, January 2011, http://www.conference-board.org/data/economydatabase ….but level sill low compared to USA/EU; and as the share of employment in manufacturing falls / stagnates throughout Asia, productivity growth is likely to decline.

10. But wages have not yet kept pace with labour productivity growth in many Asian countries… Annual average change in real wages and labour productivity, 2000s (%) Note: Covers all sectors except China (wages in public, urban units only) and Indonesia and Malaysia (manufacturing sector only). Source: ILO: Asia-Pacific Labour Market Update (December 2011). …mainly due to weak labour market institutions, implying falling wage shares with negative consequences for aggregate demand and growth.

11. Thailand – are gains from growth excluding workers? Labour wage and corporate profit, 2001–2010 • Profits growing, but wages stagnant • Weak union voice • Poor labour market governance, poor compliance Note: Companies registered with Stock Exchange of Thailand Source: MOL/NSO/SET

12. These labour market developments have contributed to rising income inequality… Gini Coefficient, earliest year in 1990s and latest year

13. Economic growth has not been translated into desired social progress… • ILO argues – mainly because (despite some achievements) sufficient Decent Work opportunities not created, labour market institutions weak • Because - Income from employment main source of income for most, sustained aggregate demand and growth in the economy • How are children affected? • Indicators of child mortality, health and education still poor in parts of Asia • 113 million children in Child Labourin Asia

14. The economic crisis has sharpened the employment challenge As exports and growth declined, employment quantity and quality affected Already high youth unemployment reached record levels Vulnerable employment / informal employment rose ‘Added worker’ effect in many households – greater risk of children being pulled out of school and sent to work Strong macro economic fundamentals pre crisis. Allowed swift policy action in many countries. However, raised questions about the sustainability of the export- led model of development

15. Cambodia – export led model creating growth but also vulnerabilities

16. The current socio economic scenario not conducive to reducing children’s work • Supply side - Parents employment status has impact on children’s schooling and work decisions – UCW studies • Demand side – establishments and businesses looking for low cost production methods – child workers often in demand because cheaper (thai shrimp industry, brick kilns) -

17. So what are the policy implications?

18. Policy implication (I): Growth in productive jobs key to balanced growth… Annual average growth in GDP and employment (%) Sources: IMF: World Economic Outlook database; ILO, LABORSTA. …renewed commitment to full and productive employment as core macroeconomic goal, greater policy coherence

19. Focus on Employment Policies in Asia • Cambodia • China • India • Indonesia • Malaysia • Mongolia • Nepal • Philippines • Sri Lanka • Vietnam Increase the rate of growth of formal employment Improve quality of informal employment and progressive formalisation of the informal Create and improve institutions for matching demand and supply of labour Often a focus on vulnerable groups

20. Guided by ILO C 122 on Employment Policy Employment promotion • Job enriching macro economic policies and sectoral policies • Enterprise development • Active Labour Market policies • Safe migration • Skills development Protection Social Security, OSH, SPF, Wage policies, Employment Insurance, CCTs, PEP Sound Industrial Relations Non discrimination

21. VIETNAM Employment Strategy 2011-2020 – to be endorsed by parliament The Global context Gender Mainstreaming Policy Integration and Coherence Vietnam Employment Strategies 2011-2020 Employment and Growth, future projections • Employment Law • Ratification of ILO Convention no. 122 Informal Economy Rural Development Investment, Trade and Enterprise Development Human Resource and Skill Development Labour Market Information Systems Migration for Employment Industrial Relations Consultation with Social Partners Employment and Social Protection

22. Policy implication (II): Growth in incomes/wages needed for balanced growth… Source: IILS, World of Work Report 2010: From one crisis to the next? (ILO, 2010). ….Need for robust wage setting mechanisms, collective bargaining and strong organised voice of workers

23. Policy implication (III): Strengthening the social protection floor crucial… Source:ILO SECSOC estimates …access to healthcare, income security for elderly and persons with disabilities, child benefits and social assistance for poor and unemployed

24. Policy implication (IV): Sustaining/improving labour productivity critical… Subregion as share of North America and EU Annual growth in output per worker (%) 16.8% 10.4% 12.7% 83.3% 16.6% Source:ILO, Trends Econometric Models, April 2010.

25. …education, skills and on-the-job training are important drivers of productivity growth Source: ILO, Key Indicators of the Labour Market (KILM), 6th Edition. …as are working conditions, rights at work and social dialogue

26. Rebalancing in Asia… • Greater emphasis on domestic consumption by raising aggregate earnings • Greater emphasis on intra-regional trade / integration • Greater emphasis on diversification of sectors and activities and raising labour productivity • Greater emphasis on coherence between economic and social policy areas Focus on employment in the post 2015 development agenda – consultations in Asia revealed ‘jobs’ a priority

27. Along with strong normative and legislative framework for regulating basic labour standards • The Minimum Age Convention (No. 138) to progressively raise the minimum age for admission to employment or work to a level consistent with the fullest physical and mental development of young persons; min age normally 15. • The Worst Forms of Child Labour Convention (No. 182) calls on member states to prohibit and undertake immediate action to eliminate the worst forms of child labour and applies to all children under 18. • Critical also the recent ILO convention on Domestic Workers (C 189) • Other International conventions, such as CRC

28. Declaration on fundamental principles and rights at work • The two CL conventions part of ILO’s Core Labour Standards, as enshrined in the Declaration on Fundamental Principles and Rights at Work • Other ‘core standards’ relate to non discrimination, forced labour and freedom of association.

29. A final point - Export led growth in Asia labour standards matter? • Demand (from mainly developed countries) for the inclusion of international labour standards (for eg. No Child Labour) in a social clause in the WTO Charter. • Such a clause would require WTO members to enforce core labour standards, or else face trade sanctions • US EU bilateral Trade agreements often have a Child labour clause; Eg Thailand Shrimp industry under tier 2 watch list for use of child labour, forced labour and abusive practices. • WB estimates that only 5 percent of working children in export sector, therefore trade sanctions may not have much impact on overall CL.

30. Eliminating WFCL by 2016 • “Mutually reinforcing action is required in the following areas: confirming and enlarging access to universal basic education; building a basic social protection floor; and promoting productive employment opportunities for parentsin order to set families on the route out of poverty and children out of child labour..” • - Accelerating action against child labour, ILO, 2010

31. Thank you For more information dasgupta@ilo.org ASIAN DECENT WORK DECADE 2006-2015 Decent Work for All