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Tackle soaring unemployment before deficits, G20 nations told

David Prosser
Thursday 27 January 2011 01:00 GMT

The world's leading economies were accused yesterday of abandoning millions of people to long-term unemployment by failing to organise a co-ordinated response to job losses in the way they confronted the financial crisis .

Philip Jennings, the general-secretary of the UNI Global Union – one of the world's largest labour organisations – said there had been a total failure to address a crisis in which 30 million people around the world had lost their jobs since the credit crunch, three-quarters of them in advanced economies.

"The working people of the world are ready to work but the G20 has to wake up," Mr Jennings said. "We need to change the rules of the game: the G20 has a pact on jobs before it, agreed by 150 countries, so let's make it work."

The row reflects continuing anger in the US, where unemployment remains stubbornly high, and in the UK, where joblessness has begun to rise again. In much of the West, youth unemployment, even among college graduates, is running at even higher levels.

Mr Jennings complained that countries such as the UK, which had focused on cutting borrowing at the expense of all other priorities, were making a mistake. "Stop this rush to the exit with austerity programmes," he told the World Economic Forum in Davos.

Laura Tyson, a former chairman of the Council of Economic Advisers under President Bill Clinton, said there was a danger that unemployment would cause tension with countries such as China, as Western workers blamed competition from Asia for lost jobs. Dr Tyson insisted that all the evidence showed that very few jobs had been lost in the West because of this threat. "Almost all of the unemployment in the West has been caused by the dramatic drop in demand," she said.

Barry Silbert, the founder of US company Second Market, said the "US is actually working quite well", but urged policymakers to do more to support small and medium-sized enterprises, which were likely to be the main engines of job creation.

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