The International Labour Organization (ILO) on Tuesday predicted that in spite of the global labour markets’ surprising resilience despite deteriorating economic conditions, but recovery from the pandemic remains uneven as new vulnerabilities and multiple crises are eroding prospects for greater social justice, the world unemployment rate would marginally increase to 5.2% in 2024, from the 5.1% rate in 2023.
The ILO, in its just published ‘World Employment and Social Outlook Trends:2024’ (WESO Trends), found that both the unemployment rate and the jobs gap rate – which is the number of persons without employment who are interested in finding a job – had fallen below pre-pandemic levels.
Specifically, it reported that the 2023 global unemployment rate stood at 5.1%, representing a modest improvement from 2022 when it stood at 5.3% just as the global jobs gap and labour market participation rates also improved in the year.
However, the labour organization disclosed that the beneath these numbers fragility had started to emerge, the report finds. It projects that the labour market outlook and global unemployment will both worsen.
The ILO projected that in 2024 an extra two million workers were expected to be looking for jobs, raising the global unemployment rate from 5.1% in 2023 to 5.2% even as disposable incomes have declined in the majority of G20 countries and, generally, the erosion of living standards resulting from inflation is, “unlikely to be compensated quickly”.
It clarified: “Furthermore, important differences persist between higher and lower income countries. While the jobs gap rate in 2023 was 8.2 per cent in high-income countries, it stood at 20.5 per cent in the low-income group. Similarly, while the 2023 unemployment rate persisted at 4.5 per cent in high-income countries, it was 5.7 per cent in low-income countries.
“Moreover, working poverty is likely to persist. Despite quickly declining after 2020, the number of workers living in extreme poverty (earning less than US$2.15 per person per day in purchasing power parity terms) grew by about 1 million in 2023 as the number of workers living in moderate poverty (earning less than US$3.65 per day per person in PPP terms) increased by 8.4 million in 2023.
“Income inequality has also widened, the WESO Trends warns, adding that the erosion of real disposable income, “bodes ill for aggregate demand and a more sustained economic recovery”, the organization added.
In addition, it foresees that rates of informal work are expected to remain static, accounting for around 58 per cent of the global workforce in 2024.
On labour market imbalances, the global labour body noted that the return to pre-pandemic labour market participation rates had varied between different groups with women’s participation quickly bouncing back but that a notable gender gap still persisted, especially in emerging and developing nations.
However, the ILO expressed concern about youth unemployment rates, which continued to present a challenge, as the rate of people defined as NEET (Not in Employment, Education or Training) remained high, especially among young women, posing challenges for long-term employment prospects.
The report also found that those people who have re-entered the labour market post-pandemic tend not to be working the same number of hours as before while the number of sick days taken has increased significantly.
The report reflected that after a brief post-pandemic boost labour productivity had returned to the low level seen in the previous decade and that despite technological advances and increased investment, productivity growth continued to slow.
The report’s findings attributed the worrisome development to the significant amounts of investment directed towards less productive sectors such as services and construction as well as skills shortages and the dominance of large digital monopolies, which hinders faster technological adoption, especially in developing countries and sectors with a predominance of low productivity firms.
Commenting on the report, ILO Director-General, Gilbert F. Houngbo, said: “This report looks behind the headline labour market figures and what it reveals must give great cause for concern. It is starting to look as if these imbalances are not simply part of pandemic recovery but structural.
“The workforce challenges it detects pose a threat to both individual livelihoods and businesses and it is essential that we tackle them effectively and fast. Falling living standards and weak productivity combined with persistent inflation create the conditions for greater inequality and undermine efforts to achieve social justice. And without greater social justice we will never have a sustainable recovery”, the labour expert added.
