Labour Market Continues To Struggle; ILO  

As the world is seeing an increase in COVID-19 and its variants, global labour markets continue to struggle and the recovery seems slow, according to the latest International Labour Organization (ILO) report.

The downgrade in the 2022 forecast reflects, to some extent, the impact that recent variants of Covid 19 , such as Delta and Omicron, are having on the world of work, as well as significant uncertainty regarding the future course of the pandemic.  This gets detailed in the World Employment and Social Outlook Trends 2022 (WESO Trends) of the ILO. The world organisation also downgraded its 2022 labour market recovery forecast, projecting a continuing major deficit in the number of working hours compared to the pre-pandemic era.

ILO Director-General Guy Ryder said; “two years into this crisis, the outlook remains fragile and the path to recovery is slow and uncertain. There can be no real recovery from this pandemic without a broad-based labour market recovery. And to be sustainable, this recovery must be based on the principles of decent work – including health and safety, equity, social protection and social dialogue.”

“We are already seeing potentially lasting damage to labour markets, along with concerning increases in poverty and inequality. Many workers are being required to shift to new types of work – for example in response to the prolonged slump in international travel and tourism,” he said.


The trend mentions that unemployment across the world would remain above pre-COVID-19 levels until at least 2023. The 2022 level is estimated at 207 million, compared to 186 million in 2019. The ILO’s report also cautions that the overall impact on employment is significantly greater than represented in these figures as several people have left the labour force. In 2022, the global labour force participation rate is projected to remain 1.2 percentage points below that of 2019.


The ILO projections for 2022 suggest that there will be a working hour deficit equivalent to 52million full-time jobs because of crisis induced labour market disruptions. It said that many of the people who left the labour force have not returned. The global labour force participation rate, having fallen by close to 2 percentage points between 2019 and 2020, is projected to recover only partially to just below 59.3 per cent by 2022, around one percentage point below its 2019 level. The global unemployment rate is projected to remain above its 2019 level until at least 2023. The total number of the unemployed is projected to decline
by seven million in 2022 to 207 million; in comparison, the 2019 figure was 186 million. The disproportionate impact of the pandemic on women’s employment is projected to narrow at the global level over the coming years, The disparity is most pronounced in upper-middle-income countries, where women’s employment-to-population ratio in 2022 is projected to be 1.8 percentage points below its 2019 level.


The ILO trend notes that temporary employment rates are higher in lowand middle income countries than in high-income countries. But the nature of
temporary employment varies between developed and developing countries, it added.

The report mentions about higher rate of job loss for temporary workers than non-temporary workers at the beginning of the pandemic, but most economies have since seen a rise in newly crated temporary jobs.


The report states that developing nations had the greatest impact and witnessed higher levels of inequality, more divergent working conditions and weaker

social protection systems even before the pandemic. The key labour market indicators in all regions – Africa, the Americas, the Arab States, Asia and the Pacific and Europe and Central Asia – are yet to return to pre-pandemic levels.


Underlying structural deficiencies and inequalities are amplifying and prolonging the adverse impact of the crisis. The large informal economy in many developing countries is impairing the efficacyof some policy instruments, since informal enter-prises have been less able to access formal lines of credit or COVID-19-related government support. Developing economies that rely on exports of labour-intensive goods or commodities have particularly struggled to adjust to volatile demand resulting from pandemic-related shifts in economic growth. Tourism-dependent economies are suffering heavily from border closures and lost revenues,

Employment losses and reductions in working hours have led to reduced incomes. Moreover, millions of children were pushed into poverty and new estimates suggest that, in 2020, an additional 30 million adults fell into extreme poverty (living on less than US$1.90 per day in purchasing power parity) while being out of paid work. In addition, the number of extreme working poor – workers who do not earn enough through their work to keep themselves and their families above the poverty line – rose by 8 million.

Moreover, changes in market demand and rising online services, skyrocketing trading costs and pandemic induced changes in labour supply have all created bottlenecks in manufacturing, impeding the return to pre-pandemic labour market conditions. Intense and prolonged supply chain shocks are creating
uncertainty in the business climate and could lead to a reconfiguration of the geography of production, with significant implications for employment, the ILO said.


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