ILO/Apex. On a construction site in the United Arab Emirates, foreign workers cut steel.
The International Labour Organization's World Employment and Social Outlook: Trends 2024 report released today shows that global unemployment is expected to rise in 2024, even as both unemployment and the employment gap are below pre-pandemic levels. At the same time, rising inequality and stagnant productivity are worrying.
According to the latest report, while the labor market has shown remarkable resilience in the face of deteriorating economic conditions, the post-pandemic recovery remains uneven, with new vulnerabilities and multiple crises eroding the prospects for broader social justice.
The report found that both the unemployment rate and the employment gap rate (i.e., the number of unemployed people looking for work) are already below pre-pandemic levels. The global unemployment rate is 5.1% in 2023, a slight improvement from 5.3% in 2022. At the same time, the global employment gap and labor market participation rate also improved in 2023.
The labor market and employment prospects will deteriorate
Behind these figures, however, vulnerabilities are also beginning to emerge, the report notes. The report predicts a deterioration in both the outlook for the labor market and global unemployment. An estimated 2 million new job seekers are expected in 2024, resulting in a rise in the global unemployment rate to 5.2% from 5.1% in 2023. In most G20 countries, disposable incomes have declined. At the same time, on the whole, the decline in living standards due to inflation is "unlikely to recover in the short term."
In addition, there are still significant differences between high- and low-income countries. In 2023, the employment gap rate in high-income countries is 8.2%, while in low-income countries it is 20.5%. Similarly, the unemployment rate in high-income countries will remain at 4.5% in 2023, compared to 5.7% in low-income countries.
Poverty and income inequality have increased
In addition, working poverty is likely to persist. In 2023, the number of workers living in extreme poverty (earning less than $2.15 per day per capita at purchasing power parity) increased by about 1 million people globally. In 2023, the number of workers living in moderate poverty (per capita daily income less than $3.65 in purchasing power parity terms) increased by 8.4 million.
The report also warns that income inequality is also on the rise and that a decline in real disposable income is "not conducive to boosting aggregate demand and a more sustained economic recovery".
The share of informal work is expected to remain unchanged in 2024, accounting for about 58% of the global workforce.
Imbalances in the labor market
The extent to which the labor market participation rate has recovered to pre-pandemic levels varies among different groups. Women's participation has rebounded rapidly, but gender disparities remain significant, especially in emerging and developing countries. Youth unemployment remains a challenge. The proportion of those defined as NEET (i.e., non-working, non-school, non-training) remains high, especially among young women, which poses a challenge to long-term employment prospects.
The report also found that people returning to the workforce after the pandemic are often unable to return to pre-pandemic working hours, while the number of sick days has increased significantly.
Productivity growth has slowed
After a brief post-pandemic upswing, labor productivity has fallen back to the slump of growth seen over the past decade. Despite technological advances and increased investment, productivity growth has continued to slow. One reason for this is that a large amount of investment has gone to less productive sectors, such as services and construction. Other barriers include skills shortages and the dominance of large digital monopolies, which hinder the rapid adoption of technology, especially in developing countries and industries dominated by low-productivity firms.
Foreground unknown
Gilbert F. Houngbo, Director-General of the International Labour Organization, said: "This report explores the issues behind key labour market data, and the issues it reveals must be of great concern. It now seems that the imbalance in the labor market is not just a post-COVID recovery process, but a structural problem."
"The workforce challenges identified in the report pose a threat to both individual livelihoods and businesses, and we must respond quickly and effectively to them," he said. Declining living standards and weak productivity, combined with stubbornly high inflation, will create deeper inequalities that will ultimately undermine efforts to achieve social justice. Without broader social justice, we will never achieve a sustainable recovery. ”
