A new report from the International Monetary Fund and the International Labour Federation suggests the recent global economic crisis could lead to social instability:

A joint IMF-ILO report said 30m jobs had been lost since the crisis, three quarters in richer economies. Global unemployment has reached 210m. “The Great Recession has left gaping wounds. High and long-lasting unemployment represents a risk to the stability of existing democracies,” it said.

The study cited evidence that victims of recession in their early twenties suffer lifetime damage and lose faith in public institutions. A new twist is an apparent decline in the “employment intensity of growth” as rebounding output requires fewer extra workers. As such, it may be hard to re-absorb those laid off even if recovery gathers pace. The world must create 45m jobs a year for the next decade just to tread water.

The Telegraph headline say this social instability was termed a “social explosion.”

So what kind of social consequences are these groups talking about? A number of commentators have noted how such recessions affect future behaviors, particularly among younger generations who become scarred by such experiences. But when a term like “social explosion” is used, it suggests images like riots, labor strikes, labor demonstrations, perhaps even the collapse of democracies in the face of pressure from angry citizens. In the United States, it is hard to imagine this. (Indeed, it is an interesting question to ask: what would have to happen for a majority of Americans to participate in more demonstrative collective action?) Even the Great Depression didn’t lead to many violent or excessive disruptions (or at least the history books don’t discuss much of this).

I wonder how much of this language is prompted by particular political viewpoints. The Telegraph hints at this:

“Most advanced countries should not tighten fiscal policies before 2011: tightening sooner could undermine recovery,” said the report, rebuking Britain’s Coalition, Germany’s austerity hawks, and US Republicans. Under French socialist Strauss-Kahn, the IMF has assumed a Keynesian flavour.

The whole situation bears watching – how will average citizens respond?