Jobs that are good for development can be transformative
The private sector is key; public action sets the stage
October 1, 2012—Working under the hot Jamaican sun on a noisy construction site is not easy, but the job means a lot to Shernette Chin. “It helps me out with my kids,” says Shernette. “If I didn’t have this job, I don’t know how I would manage.”
While individuals value jobs for the income, some jobs benefit societies as well. Jobs for women like Shernette can lead to more investment in children’s health and education. Jobs in conflict-affected areas can help young people look beyond violence and bring people of diverse backgrounds together. And jobs connected to global markets bring home new technologies and managerial knowledge.
“A good job can change a person’s life, and good jobs for development can transform entire societies.” says World Bank Group President Jim Yong Kim.
‘Jobs are the cornerstone of development’ is the message of the latest World Development Report 2013: Jobs. According to the report, jobs with high development payoffs can reduce poverty, make cities work, and transform societies. Through their ability to raise living standards, spur productivity and contribute to social cohesion, jobs drive development.
Ghaleb Ahmed, a father of two who works on a community road construction project in rural Yemen says the project saved him from hardship.
“It gave us money to build a road we all need, and also to buy household items like wheat and vegetables,” says Ahmed.
Beyond giving him an income, the job has helped Ahmed acquire skills. In addition to his usual work at the project site, Ahmed also helps out with other activities and at times, supervises co-workers. Fulfilling these roles provides Ahmed with satisfaction and also pride, especially compared to the time when he had to make ends meet through casual labor.
In many societies, jobs are fundamental to an individual’s identity and self-respect. By helping define people’s identities, values, and behaviors, jobs can also affect the cohesiveness of societies. A survey from Indonesia, for example, found that people who got a job were more likely to participate in the community than people who lost their jobs.
Jobs also connect and give voice to individuals.
“To me,” says Adriana, a college student from Mexico, “a job means an opportunity to learn and contribute to my community. I think training programs like the one I’m in can help alleviate youth unemployment in my country.”
“With more than 621 million young people neither working nor studying, ensuring youth are gainfully engaged is a growing challenge with serious implications for the future,” says Martin Rama, WDR Director.
But not all jobs are good for development - some do very little or even have negative spillovers. Activities that exploit workers, expose them to dangerous environments, or threaten their physical and mental well-being are bad for individuals and societies alike. Today, an estimated 21 million people globally are victims of bonded labor, slavery, forced prostitution, and other forms of involuntary work.
In many cases, jobs are not wage employment, with an employer and a paycheck. Based on analysis of nearly 800 surveys and census data, the WDR 2013 finds that more than 3 billion people are working, but nearly half work in farming or small household enterprises.
At a broader level, the contribution of jobs to living standards, productivity, and social cohesion depends on a country’s demography, endowments, institutions and level of development. Jobs challenges are not the same everywhere. For example, worldwide, just to keep employment rates constant, the number of jobs will have to increase by around 600 million over a 15-year period. At the country level, though, this varies from about one million people entering the labor force in East Asia every month to an actual decline of the labor force in many aging countries in Eastern Europe.
With a labor force comparable to Vietnam’s - but with lower wages - Ethiopia has the potential to compete in the global apparel market. But, as a predominantly agrarian economy, Ethiopia faces a challenge as well as opportunity in making agricultural jobs more productive and creating employment opportunities outside farms, and moving up the value add ladder through light manufacturing and other sectors.
This challenge reflects the highly fluid nature of jobs, faced not only in Ethiopia, but across the world. As some jobs become better and others disappear, people move into new jobs. This reallocation of labor is an important factor of productivity growth.
The report says that the private sector is the main engine of job creation and a source of nearly 9 of every 10 jobs in the world, but governments need to support the private sector in creating jobs. Governments can do so by following a three-layered policy approach that focuses on fundamentals, labor policies and prioritization.
First, governments should focus on fundamentals such as macroeconomic stability, an enabling business environment, human capital, and the rule of law. Second, they should provide access to voice and social protection to the most vulnerable, and not let labor policies become an obstacle to job creation. Third, governments should identify which jobs would do the most for development given their specific country context, and remove or offset obstacles to private sector creation of such jobs. Sometimes these obstacles may lie outside of the labor market; for example land reforms and urbanization policies can be vital for job creation.
In addition to national policies, governments should cooperate on a global jobs agenda. This includes improving respect for rights through corporate social responsibility, supporting trade in services through international collaboration, and helping sending and receiving countries reap the benefits of migration through bilateral agreements. International collaboration to generate and disseminate reliable data on all jobs - is also urgently needed to move jobs center stage.