Governments in many countries, particularly in Europe, have implemented radical reforms and austerity measures in an effort to combat the economic crisis. But this approach has “devastating consequences” on the job market, the International Labor Organization (ILO) warned on Monday.

Furthermore, these measures have not achieved the desired result of reduced deficits, the United Nations agency said. The “World of Work Report 2012” called the global employment situation “alarming,” and urged governments to recognize that job-centered policies have a positive effect on the economy.

“The austerity and regulation strategy was expected to lead to more growth, which is not happening,” director of the ILO’s Institute for International Labor Studies, Raymond Torres, told the press in Geneva. “The strategy of austerity actually has been counterproductive from the point of view of its very objective of supporting confidence and supporting the reduction of budget deficits.”

The report could heat up the debate about how to handle the euro crisis, which has recently focused on criticism of German Chancellor Angela Merkel for pushing tough austerity measures on heavily indebted European countries. The recent suggestionby European Central Bank President Mario Draghi to implement a “growth pact” has been met with widespread approval amid the growing austerity backlash.

Conservative French politician and European Commissioner for Internal Market and Services, Michael Barnier, told German daily Die Welt on Monday that he also supports growth measures. “It is possible to reconcile the good stewardship of public budgets with growth,” he told the paper. “Thus I advocate that we prepare a European growth initiative in addition to contracts for budgetary discipline.”