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ILO Reports Significant Jobs Growth in Commerce Worldwide during 1990s

GENEVA (ILO News) - Wholesale and retail trade, stimulated by technology, evolving consumer demand and trade liberalization factors, saw a significant growth in new jobs worldwide during the 1990s, according to a new ILO report issued here today.

Press release | 25 October 1999

GENEVA (ILO News) - Wholesale and retail trade, stimulated by technology, evolving consumer demand and trade liberalization factors, saw a significant growth in new jobs worldwide during the 1990s, according to a new ILO report * issued here today.

Noting that commerce has become a prime engine for job creation worldwide, the report cited estimates that retail commerce had produced some 53.5 million jobs between 1990 and 1997 in 93 countries reviewed.

Of the total, approximately 40 million jobs were added in the 17 Asian and Pacific countries reviewed, half of them in China alone; six million new jobs in 24 industrialized countries where statistics are available; another six million new jobs in 27 Latin American countries; and 1.5 million additional jobs in 19 transition economies.

Among the features of work in the sector, the report cites a large proportion of female employees, high labour turnover rates and a high proportion of workers in employment relationships that are neither full time nor permanent. In most countries, women are the most affected by unemployment in the commerce sector - largely attributable to their "higher representation in low-skilled, part-time and precarious employment".

"The impact of globalization and restructuring on employment in commerce therefore clearly has important consequences for gender and equality-related policies and initiatives throughout the world," the report said.

Though there is no certainty as to the impact of electronic commerce (e-commerce) on employment, an estimated 760,000 jobs have already been created by the Internet in the United States alone. In Germany, recent estimates show some 200,000 new jobs will have been created in communication services between 1995 and 2005 - of which over half are in new electronic commerce services. E-commerce could also generate some 500,000 new jobs in the European Union (EU) by 2005, according to an EU study. While electronic commerce may lead to expanded employment in traditional retailing in the near term, as retailers maintain a presence in both physical and cyber channels, disintermediation and the changes in the value added chain are expected to have a negative impact on employment in this sector.

The report is to be discussed at a tripartite meeting here on 25-29 October, which will review the effects of globalization and other factors on employment and working conditions among commerce employees. The meeting will also focus on the role of international labour standards in the sector.

Despite layoffs following consolidation and concentration in the commerce sector as a result of mergers and acquisitions, the report says, growth and employment potential remain higher than in many other sectors. In a majority of countries, the number of workers in the commerce sector increased while the proportion of commerce employees among total employment increased in half the countries surveyed, the report says.

The report cautions, however, that although commerce is one of the fastest growing industries and one of the largest sources of new jobs in the world, the hopes it raises for better working and living conditions "are frequently balanced by contradictory concerns, mainly related to fears of an emergent global social order almost entirely directed by market forces".

"The labour and social impact of globalization on commerce implies that political, business and union leaders must accept their share of responsibility and pay heed to international labour standards, thus contributing to an improvement in working conditions," the report says.

Expansion of international trade that saw a rise to an estimated US$6.5 trillion and growth in internal trade have made commerce pivotal to economic growth. Big multinational or national retail chains such as Wal-Mart, The Gap, and Toys 'R' Us in the United States, Metro group AG in Germany, Carrefour SA and Pinault-Printemps-Redoute in France and Ito-Yokado (Japan) today rank among the largest businesses in many industrialized countries.

Especially in developing countries, the scale of transnational corporations puts local enterprises out of business. In Brazil, for instance, intense competition forced the owners of four of the top dozen supermarket chains to sell out in 1996. On the other hand, multinationals challenge the locals to boost up their labour productivity, the report says. In Latin America and Eastern Europe, a number of retailers are already successfully responding to the challenge.

There is a marked tendency in some areas of commerce to replace low-skilled jobs by jobs requiring a higher level of education. The segmentation of customers and improvements in the quality of customer service creates fresh needs and new company training policies. This implies a radical change in the target groups of the training policy extending it to those employees who are in direct contact with customers. A survey by the European Centre for the Development of Vocational Training (CEDEFOP) showed that in 80% of the companies, continuing training existed for shop assistants, while only 26.6% of the companies provided continuous training for cashiers. Surprisingly, the survey found that the smallest companies - up to 100 employees - involved all their shop assistants in training, while the largest involved only a half.

Retail and wholesale trade are among the least unionized industries in many countries. However, trade union membership rates vary considerably from country to country. In Finland, the unionization level was as high as 81.9%, while in the United States a mere 5.8% of wholesale and 5.2% of retail workers were union members in 1998.

A number of studies and reports have alleged infringements of workers' rights by contractors of multinational retailers. The meeting will therefore discuss voluntary initiatives such as codes of conduct and social labelling whose use by multinational enterprises in the retail sector is expanding due to its rapid internationalization.

* Human resource implications of globalization and restructuring in commerce. Report for discussion at the Tripartite Meeting on Human Resource Implications of Globalization and Restructuring in Commerce. International Labour Office, Geneva, 1999. ISBN 92-2-111761-8. Price: 20 Swiss francs.