Cannot be taken for granted –ILO Director General says of sustaining middle class

ILO Director General Guy Ryder

INTERNATIONAL Labour Organisation (ILO) Director General, Guy Ryder, has warned that an adverse shock to the BRICS economies could unwind efforts in building a robust middle class in their countries.Speaking at the first ever meeting of Ministers of Labour and Employment of the BRICS countries, Mr Ryder noted that while in recent decades BRICS countries have been the drivers of the growing “global middle class”, many such households remain not far above the moderate poverty line.

He stressed that, in the current environment, continued high rates of economic growth sustaining the middle class cannot be taken for granted.

“It is important to note — particularly for those of us responsible for employment and social well-being — that growth is not the whole story. High growth does not guarantee decent work, inclusion and equity,” said Mr Ryder.

He emphasised the need for effective public investments in infrastructure, to boost job creation while addressing productivity and economic transformation concerns.

He also noted that another instrument to create more and better employment is enterprise modernisation.

“There is solid evidence that enterprises attaining higher productivity through product or process innovations also exhibit higher employment growth,” Mr Ryder said.

The ILO Director General pointed to the role of the small and medium size enterprises (SMEs) as the “main providers of employment” in the BRICS countries. In this regard, he recalled that the ILO has made working conditions and productivity in SMEs a priority area of work in the last two years.

Mr Ryder called on the BRICS countries to “build solid bridges and ongoing communication between training providers and enterprises, in order to match skills provision to labour needs and demand,” and to ensure the direct participation in the process of employers and workers together with Government.

“Continuous workplace training and lifelong learning enable workers and enterprises to adjust to an increasingly rapid pace of change,” he added.

“In matching skills and demand, an important role belongs to public employment services. They can help connect enterprises with workers, but also with training institutions,” he said.

He told delegates that a priority for their countries should be to reinforce pension systems for today’s working population, so that they would have income security when they grow old.

He noted that much progress had been made by the BRICS on social protection, but beyond that actual financial effort, there is work to be done on the mechanisms used to provide coverage, the adequacy of benefit level, and the strength of institutional capacities to deal with changing labour market patterns.

“The ILO Conventions and Recommendations on social protection provide sound advice on building social protection and pensions, advice that is applicable to countries at all levels of development, and that has been tested over time,” Guy Ryder said.