For the women and men working in these countries, a key concern now is to live through yet another boom-bust crisis of which they have seen all too many in the past already:
- For instance, Argentina saw its rate of working poverty increase by 10 percentage points during the early 2000s, after the peso had to be delinked from the dollar parity (see chart).
- Similar developments took place in Mexico during the peso crisis in the 1990s.
- India seems more immune but the still high rate of working poverty really does not leave a lot of room for adjustment policies. So the interest hike that the Reserve Bank of India implemented last week is really bad news for the Indian labour market.
Some observers have called for belt-tightening. However, in the current situation with already high levels of poverty and unemployment, the focus should lie on focussing public policies on generating jobs. Currently, the emerging world represents the bulk of the increase in global unemployment. As I have insisted in an interview I gave at Deutsche Welle (see below), if the turmoil in Argentina, India and Turkey continues, unemployment rates might increase much faster than anticipated in the ILO's recent Global Employment Trends report.