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Labor laws weaker, millions of jobs missing globally this May Day

May 1, 2012 |  4:30 am

Unemployed

As workers around the world mark May Day, a new report finds the world is still short 50 million jobs that were lost to the economic crisis, labor laws have been weakened and new jobs tend to pay little.

“This is not a normal employment slowdown,” wrote Raymond Torres, director of the International Institute for Labor Studies, in an editorial introducing the International Labor Organization report.

Four years into the global crisis, the problems dogging the world economy are harder to eradicate, Torres wrote. He argued that European countries that have adopted tough, unpopular measures to cut down their deficits are actually falling into an "austerity trap" that has weakened their growth.

Such measures have been defended by governments as the only way to escape debt. Many countries have also confronted the crisis by altering their labor laws -- usually by reducing protections for workers, the International Labor Organization report found. Such changes include cutting back on severance payments, expanding the grounds for firing and prolonging probationary periods.

In Estonia, for instance, the government limited severance payments to one month, instead of two to four months. Spain shortened the advance notice for some employee dismissals to 15 days.

Tightening belts has been deeply unpopular across Europe, where several governments have fallen.

While workers have less protection from the law, they are also more likely to work less than full time, the report found. And though some new jobs have sprung up, they tend to pay relatively little.

Not all countries are recovering at the same pace: Countries with still-developing economies have been bouncing back faster than established powers such the United States or France, the ILO noted. Since the crisis began, poverty rates grew in many advanced countries while dropping in most developing ones, the report said.

Wealthy Western countries also suffered some of the biggest jumps in long-term unemployment, with Denmark, Ireland, Spain, Britain and the U.S. topping the list. All in all, the report predicted that employment levels will lag in advanced economies until at least late 2016.

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-- Emily Alpert in Los Angeles

Photo: Job-seekers wait outside a job center before it opens in Madrid, Spain. Credit: Angel Navarrete / Bloomberg

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