The world is on the verge of a new and deeper jobs recession that may ignite more social unrest unless ways are found to create 80 million jobs worldwide within the next two years.

The dire warning was given in Geneva (October 31) ahead of the G-20 Summit in Cannes, France, by the International Labor Organization (ILO) in its 2011 report ‘Making Markets Work for Jobs’. 

“We have reached the moment of truth,” said Raymond Torres, Director of the ILO International Institute for Labor Studies. “We have a brief window of opportunity to avoid a major double-dip in unemployment.”

The report recommends that 80 million jobs need to be created to bring the world back to pre-crisis employment levels but acknowledges that the current slow economy will likely create only half that number. The ILO put global unemployment at a record high of over 200 million worldwide.

The report proposes an urgent three-pronged approach, starting with a coordinated effort to put wages back in line with productivity in surplus economies like China, Germany, Japan and the Russian Federation. “More balanced income developments in surplus countries would be in the interest of those countries while also supporting recovery in deficit counties, particularly those in the Euro area.”

The second recommendation is to support real investment through financial reform, notably in advanced economies where “the debate has often centered on fiscal austerity and how to help banks – without necessarily reforming the bank practices that led to the crisis”.

Thirdly, the report calls for strengthening employment programs funded through a broader tax base.  “We don’t think it’s a good idea to increase labor taxes,” Torres said, adding that they are already high. “Instead we should look at property taxes or taxes on certain financial transactions.”

Torres noted that the US is the only advanced country with a national jobs plan along the lines the ILO is recommending. “We are talking about the Obama jobs plan which looks at job creation, making a closer connection between wages and productivity and focusing on small enterprises.” He acknowledged, however, that the plan has stalled in the US Congress but noted that, “It has the virtue of existing and has not been challenged in terms of an alternative plan.”

Finally, the report warns that unless coordinated action is taken to even the burden of the current economic crisis, social unrest will only increase. “In 45 of the 118 countries examined, the risk of social unrest is rising. This is especially the case in advanced economies, notably the EU, the Arab region and to a lesser extent Asia,” the report said.