Bis Urges Deregulation Of Services Sector

Deregulating the services sector is crucial to promoting employment, the Bank for International Settlements (BIS) said, noting faster jobs creation remains the best way to help low-income families.

"Given that globalisation frequently generates a need to shift resources from tradeable to non-tradeable sectors, deregulation of the services sector is of principal importance in preventing employment from falling," BIS said in its 67th annual report.

But in many cases high minimum wages relative to labour productivity and concerns about equity prevent service businesses from absorbing redundant resources, it added.

While many countries are wary of letting income disparities widen the gulf between rich and poor, "faster employment growth tends to be the most equitable and effective way of improving the prospects for low-income households".

 

BIS pointed out that unemployment in some big continental European countries has hit its highest levels since the 1930s. Half of the world's 35 million unemployed last year were in European Union (EU) countries, where the jobless rate averaged 11.5 per cent.

The situation was better in places like the United States and Britain, where the business cycle was more advanced.