GENEVA (ILO News) – Despite the worsening economic situation, the labor market has shown remarkable resilience, but new vulnerabilities and multiple crises are showing signs of resilience, according to a new report from the International Labor Organization (ILO). The recovery from the pandemic remains uneven, with prospects for greater social justice being undermined.
ILO’s Global employment and social outlook trends: 2024 (WESO Trends) found that both the unemployment rate and the job gap rate (the number of people without a job but interested in finding one) are below pre-pandemic levels. The global unemployment rate in 2023 was 5.1%, a slight improvement from 5.3% in 2022. Global employment inequality and labor market participation rates also improved in 2023.
However, the report finds that vulnerabilities are beginning to appear beneath these numbers. The outlook for the labor market and the global unemployment rate are both expected to worsen. An additional 2 million workers are expected to seek work in 2024, raising the global unemployment rate to 5.2% from 5.1% in 2023. Disposable income is falling in the majority of G20 countries, and the decline in living standards caused by inflation is generally “unlikely to be quickly offset”.
Moreover, important differences still exist between high-income and low-income countries. In 2023, the employment gap rate was 8.2% in high-income countries, while it was only 20.5% in low-income countries. Similarly, the unemployment rate in 2023 remained at 4.5% in high-income countries, but 5.7% in low-income countries.
Moreover, working poverty is likely to continue. Despite rapidly declining since 2020, the number of workers living in extreme poverty (per capita he earns less than USD 2.15 per day in purchasing power parity terms) will increase in 2023. has increased by approximately 1 million people. In PPP terms (US$3.65 per person per day), in 2023 he increased by $8.4 million.
WESO trends are also widening income inequality, it warns, adding that falling real disposable income “bodes ill for aggregate demand and a more sustainable economic recovery.”
The share of informal employment is expected to remain stable, accounting for approximately 58 percent of the global workforce in 2024.
labor market imbalances
The return to pre-pandemic labor market participation rates will vary by group. Although women’s participation has rebounded rapidly, significant gender disparities remain, particularly in emerging and developing countries. Youth unemployment remains a challenge. The proportion of people defined as NEET (not in employment, education or training) remains high, particularly among young women, posing challenges to long-term employment prospects.
The report also found that people who re-entered the labor market after the pandemic tended not to work the same hours as before, while taking significantly more days of sick leave.
Productivity growth slows down
After a brief post-pandemic rise, labor productivity has returned to the lowest levels seen in the past decade. Importantly, the report also finds that despite technological advances and increased investment, productivity growth continues to slow. One reason for this is that large investments were directed to less productive sectors such as services and construction. Other barriers include skills shortages and the dominance of large digital monopolies, which prevent rapid adoption of technology, particularly in developing countries and sectors dominated by low-productivity firms.
Outlook is unclear
“This report looks behind the scenes at key labor market statistics, and what it reveals should be of great concern. These imbalances are not just part of the pandemic recovery; It’s beginning to look like something,” said ILO Director-General Gilbert F. Kennedy. “The detected workforce challenges pose a threat to both individual lives and businesses, and it is essential that they are tackled effectively and quickly. Combined with greater inflation, this creates conditions for further inequality and undermines efforts to achieve social justice. And without greater social justice, sustainable Recovery never comes.”