DUSHANBE, June 4, 2013, Asia-Plus -- The latest edition of the ILO’s World of Work report shows encouraging, but still-fragile signs of improvement in emerging and developing economies, while many advanced economies continue to face high or even rising unemployment and increasing inequalities.

As the global economy continues a slow recovery from the financial crisis, most emerging and developing countries are reportedly experiencing rising employment and narrowing income inequalities compared to their high-income counterparts.

However, the gap between rich and poor in most low and middle-income countries remains wide.  Many families who have managed to rise above the poverty line are at risk of lapsing back.

By contrast, income inequalities have increased in advanced economies over the past two years, against the backdrop of increasing global unemployment – predicted to rise from the current 200 million to nearly 208 million by 2015.

According to the World of Work report 2013 “Repairing the economic and social fabric”, income inequalities rose between 2010 and 2011 in 14 of the 26 advanced economies surveyed, including France, Denmark, Spain and the United States.  Inequality levels in seven of the remaining 12 countries were still higher than before the start of the crisis.

Economic inequalities are also on the rise, as small firms lag behind their larger counterparts in terms of profits and productive investment.  While most large enterprises have regained access to capital markets, start-ups and small enterprises are disproportionately affected by bank credit conditions. This is a problem for job recovery now and affects economic prospects over the longer term.

The report shows that middle-income groups in many advanced economies are shrinking, fuelled in part, by long-term unemployment, weakening job quality and workers dropping out of the labor market altogether.

By contrast, the report provides evidence that pay of chief executive officers in many of those countries has once again soared, following a short pause in the immediate aftermath of the global crisis.

The size of the middle-income group in developing and emerging economies has increased from 263 million in 1999 to 694 million in 2010. This is a major achievement of a growing number of Latin American and Asian countries, which spread more recently to some countries in Africa and the Arab region.

However, a vulnerable “floating group” – those just above the poverty level – increased from 1,117 million in 1999 to 1,925 million in 2010, mostly in low and low middle-income economies.  This vulnerable group is close to three times the size of the middle-income group.

In developing countries, the most important challenge is to consolidate recent progress in reducing poverty and inequality.