T HE first ever Jobs conference of the world's leading Industrial powers -- the Group of Seven (G-7) countries — held in Detroit. USA last month, ended without prescribing any solution for their persistent problem of unemployment. Originally billed as the O 7 Jobs summit, the two-day conference on March 14-15 was attended by the finance and labour ministers from Britain, Canada. France. Germany. Italy. Japan and the United States. Unemployment Issues raised at the Detroit conference would now be. considered at the economic summit of the 0-7, to be held in Naples. Italy, this summer

Unemployment in the European Union (EU) Is said to be running at over 10.7 per cent and could peak at 11.5 per cent in mid-1995. Unemployment In the USA Is behaving better and fell to 6.4 per cent at the end of 1993. the lowest In 3 years, although it crept up to 6.5 per cent in February. 1994. Unemployment In Japan hit a 6-year high of 2.8 per cent In 1993 and Is now said to be nearer 3 per cent. In a country like ours, where unemployment. Including under-employment, is generally reckoned to be around 30 per cent, the deep concern shown by the G-7 countries even over a Jobless rate of 10 per cent, would seem difficult to fathom. We would perhaps consider ourselves doubly blessed If our rate of unemployment ever came down to 10 per cent. The reality Is — G-7 Is the club of world's affluent nations. To most of them, even a 3 per cent unemployment rate might spell a crisis.

The G-7 Jobs conference did not bring about a convergence of ideas on how to tackle unemployment in the leading industrial countries. Nonetheless, the meeting did bring to focus certain aspects

of the unemployment syndrome which might provide food for thought to the poorer nation* as well.

One such pointer that emerged from the debate is the fact that labour market policies like stiff employment-protection rules, present wage bargaining systems, minimum wage laws, working-hour regulations. more often tend to destroy Jobs rather than create ney ones. At best, these codes protect those already at work at the expense of Job-seekers. In short, such measures have a negative impact on employment and curb labour market flexibility. Employers have less incentive to create additional Jobs and new entrants into the workforce are denied access to employment.

Social protection laws and generous unemployment benefits also are seen as factors In hibitlng employment. Such passive labour market measures. It is argued, foster indolence among the unemployed and they turn less keen in seeking new jobs. Employers feel less obliged to hire displaced workers, who are getting government dole anyway. Besides, aid to the unemployed is finance with the taxpayers money. It's not easy to raise new taxes. In a situation of rising Joblessness. Increased public spending on unemployment benefits strains gov ernments budgetary resources and could impair Its ability to undertake active labour market measures such as public employment programmes, training. placement services and so on.

How to protect the Jobs of their less-skilled workers I* the problem that is worrying the rich industrial countries most. Yet. there Is also a growing realisation that they need to move to the upper end of the market and produce more of high-value-added goods. Understandably, need to Improve the education, training and skill of the workforce was high on the agenda of the G-7 ministers at the Jobs conference. Are the world s leading Industrial nations then aiming at building for them exclusively high skilled, high wage economies — leaving low-skiHed. low-paid jobs to the poorer countries? The Idea ties in nicely with the often ignored concepts of international division of labour — letting the poorer countries exploit their comparative advantages the best they can.

Even if the industrial powers eventually adopt it as a policy prescription, shift to a high-skill, high-wage econoJhy will call for a painful period of transition. Time Is another factor Meanwhile, some of the leading industrial countries in Europe are trying out unorthodox modes of tackling unemployment. Many sceptics, however. view these measures as quick fixes' to deal with the problem.

Shortening the workweek and sharing jobs, come high on the list of (quick fix' measures to combat unemployment. The Idea generally Is to switch from a five-day to a four-day workweek accompanied by a proportionate reduction in wages, tax cuts and incentives for tlje concerned companies to compensate them for the added cost. Everyone then shares whatever work is available. "Work less, and everyone works." Is the motto. Some of the giant industrial firms In Germany are said to have already made the switch. Enthusiasts favouring the idea say that the plants giving the new system a try have seen productivity gain, even off setting- the cost of hiring more people. Face with the spectre of wholesale layoffs, the exist ing workers also have turned more amenable to accepting limited pay cuts to preserve jobs And they are getting more time for leisure. ■

Another idea floated at the G-7 jobs conference seeks to allow employees to work a fixed number of hours in the year, rather than each week This will allow employers greater flexibility to deal with seasonal variations and held stretch out job availability. Workers would be able to plan their own free time better and. as an analyst put It in a slightly different context, gam greater access to personal freedom to enjoy the benefits of automation rather than suffer Its rav ages

In parenthesis, it's worth pointing out that sort of a work-sharing deal is working out in Japan as well. To protect Jobs, some of the trade unions In Japan are said to be agreeing to a freeze on wages. Afraid of layoffs, some others are accepting lower pay rises during wage bargaining sessions with employers. In essence, the workers are settling for lower benefits in exchange for Job security and In the hope that their sacrifice would promote new hiring by the employers.

In France, one person in four of the workforce in the age group under 25. Is unemployed. To encourage employers to hire young people, the French government recently passed a law authorising payment of salaries below the minimum wage to the employ ees in this age group. The stu dents erupted in a storm of protest against the move The government then backed off. The youth won, the day. for now at least.

Last year, the European Commission had drawn up an ambitious programme to ward off unemployment in its member countries. The plari called for creation of new jobs through huge public works projects The programme was to be funded by multibillion dollars public borrowings. Some of the member states baulked at the idea of such huge borrowings by governments. They argued that the plan was not in conformity with governments attempts to cut their deficits and reduce public borrowings to restore sustainable growth. In the end. the Commission's plan could not make much of a headway.

By and large, the message from the Detroit jobs conference carried a similar Import. Although the G-7 ministers postponed a decision for the future, tfiey did seem to agree on the importance of a right mix of macroeconomic policies to tackle their deep-seated problem of unemployment. They emphasised the need for structural reforms to make their labour market flexible and more adaptable to change.

ALL the same, certain disturbing signals also emanated from the G-7 jobs conference. The leading Industrial nations do not attribute the phenomenon of joblessness in their countries only to structural imbalances and automation. They continue to blame the reduced demand for less-skilled labour in the West, on trade with developing countries. Import of low-priced goods from the

developing nations, they maintain. is equally responsible for the Joss of Jobs in their

The sentiments expressed at the G-7 Jobs conference that low wages and poor working conditions in the emerging economics give them an unfair trade advantage at the expense of jobs In the industrialized countries, finds and echo in the latest move by the rich nations to write new global standards for labour conditions into the world trading rules. The leading industrial nations are said to be holding urgent consultations to evolve a common position In time for the signing of the Uruguay Round global trade agreement in midApril In Morocco. The idea is to make the new World Trade' Organization (WTO) which would succeed the General Agreement on Tariffs and Trade (GATT) deal with the issues relating to labour standards and related social matters. The WTO could then penalize the trading nations whc do not conform to the newly established global norms for working conditions.

The proponents of the initiative call the export of low-cost goods by countries having cheap labour, social dumping. These countries, they say. fail to meet their social responsibilities. are thus able to keep wages down and indulge in social dumping by exporting the low-cost products. The objective is not to take away ' the comparative advantage of the low-wage countries, advocates of the move hasten to add. The alm is a leveling of workers rights world-wide, they say In fact, it rather seems that what the industrial nations might actually end up doing. Is to inject into the poorer economies, something of the labour market rigidities they themselves decried at the G-7 |obs conference.