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G20 Summits > 2012 Los Cabos Summit
G20 Ministerial and Deputies Meetings

L20 Statement to the G20 Summit in Los Cabos, 18-19 June 2012

June 1, 2012
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Introduction

The G20 is facing a jobs emergency. Global unemployment has grown to around 200 million. The OECD and ILO estimate that 21 million jobs need to be created each year to return to pre-crisis employment rates by 2015.[1] Yet, with several economies now in recession, other OECD countries experiencing low rates of growth, and growth slowing in emerging economies, unemployment is likely to rise further. Precarious and informal work arrangements, already at unacceptable levels, are increasing. Financial markets continue to wreak havoc on our democracies, economies and societies. People are angry and social tensions are running high. 

Governments have failed to deliver on their commitments to prioritise employment and to curb the power of the financial markets. At the onset of the crisis, the G20 demonstrated its effectiveness, taking coordinated action to stabilise global demand and agreeing on proposals for financial regulation. But momentum has been lost with governments shifting to austerity instead of fighting recession and building sustainable and inclusive growth. These policies are failing; austerity and growth are not compatible. At Cannes, G20 Leaders adopted the G20 Cannes Action Plan for Growth and Jobs. At Los Cabos G20 Leaders must reassert their relevance by putting in place an employment-centred, inclusive growth plan to increase demand and measures to raise appropriate tax revenue, thereby reducing debt in the medium-term. They must also take further measures to limit the size and complexity of "too-big-to-fail" global banks and to curb financial speculation, so as to enable government growth plans to succeed. It is democratic governments, not financial markets, which should set the policy agenda.

In their political statements and messages, G20 governments and inter-governmental organisations identified the need to tackle the jobs crisis by addressing the quality as well as the quantity of jobs. However, the reality is that labour rights are under attack at domestic, regional and international level, through efforts to break up collective bargaining structures, lower minimum wages and remove employment protection. There are also significant cutbacks in public sector employment. These are misguided policies. They will not restore growth; they will only serve to destroy workers' confidence, eliminate public support, and widen income inequality – now recognised as one of the contributory factors to the crisis.[2]

The escalating jobs crisis is hitting young women and men particularly hard, with an estimated 75 million young people around the world unemployed. Together with rising long-term unemployment, the increasing rate of youth unemployment threatens to weaken the long-term growth potential and increase the risk of social break-down and political instability.

G20 Leaders must make the implementation of their past commitments a cross-cutting objective. They need to shift away from austerity towards employment-contingent, inclusive growth policies. They must act to increase economic cooperation and boost demand and employment, particularly quality employment, increase financial regulation and implement a Financial Transactions Tax, put in place a Social Protection Floor and support development; tackle climate change and promote sustainable growth; and achieve more democratic and equitable global governance.

Summary
I. Introduction and Summary
II. Growth and Employment
III. Strengthening the Financial System and Fostering Financial Inclusion
IV. Financial Architecture
V. Development Resources
VI. Food Security and Commodity Price Volatility
VII. Sustainable Development, Green Growth and Climate Change
VIII. Governance and the G20

[1] ILO-OECD Statistical update for the G20 Meeting of Labour and Employment Ministers, 26-27 September 2011.
[2] "Inequality, Leverage and Crises," Michael Kumhof and Romain Rancière, IMF, November 2010.

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Source: Trade Union Advisory Committee of the Organisation for Economic Co-operation and Development