Global unemployment remains very high, particularly among developed economies, with the situation in Europe being the most challenging. The unemployment rate continued to climb, reaching a record high of nearly 12 per cent in the euro area during 2012, an increase of more than one percentage point from one year ago. Conditions are worse in Greece and Spain where more than a quarter of the working population is without a job. At the same time, long-term unemployment (over one year) in developed economies stood at more than 35 per cent by July 2012, affecting about 17 million workers. Such a prolonged duration of unemployment tends to have significant, long-lasting detrimental impacts on both the individuals who have lost their jobs and on the economy as a whole.
The shares of working poor remain high and most workers tend to be employed in vulnerable jobs in still expanding informal sectors. Furthermore, youth unemployment and gender disparities in employment remain key social and economic concerns in many developing countries.
The global slowdown and increased risks to the employment situation in developing countries will imply a much slower pace of poverty reduction and a narrowing of fiscal space for investments in education, health, basic sanitation and other critical areas needed for accelerating the progress towards achieving the Millennium Development Goals (MDGs). This holds true in particular for the least developed countries (LDCs); they remain highly vulnerable to commodity price shocks and are receiving less external financing as official development assistance (ODA) declines in the face of greater fiscal austerity in donor countries.