Report on the World Social Situation 2011

The Global Social Crisis

image of Report on the World Social Situation 2011

This report explores the social impact of the great recession and warns of the possibility of continuing global social crisis in the face of increasing fiscal consolidation and austerity measures, which threaten the sustainability of a recovery. The effects of the financial and economic crisis on social progress have been sharp, widespread, and deep. Given the fragility of the economic recovery and uneven progress in major economies, social conditions are expected to recover slowly. Increased poverty, hunger and unemployment due to the crisis will continue to affect billions of people in many developed and developing countries for years to come. Austerity measures in response to high government debt in some advanced economies are not only threatening public sector employment and social expenditure, but are also making the recovery more uncertain and fragile.



The Great Recession and the jobs crisis

The global financial and economic crisis triggered sharp output contractions in almost all industrialized economies in 2009 for the first time in the post-Second World War era. Besides the direct impacts of this contraction in developed economies, subsequent declines in cross-border trade and the rising cost of finance had serious negative effects on emerging and developing economies. In particular, as businesses cut production in response to lower aggregate demand, workers were shed in large numbers, sharply increasing unemployment worldwide. Between 2007 and the end of 2009 there was an unprecedented increase in the numbers unemployed (International Monetary Fund and International Labour Organization, 2010). This reported increase in unemployment most likely underestimates the true depth of the problem, since job loss figures are based on official labour statistics, which in many developing countries only covers employment in the formal economy, mainly in urban areas.


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