The global economy is decelerating, creating significant obstacles for labour markets to recover fully, according to the World Employment and Social Outlook: Trends 2025 report.
In 2024, global employment grew at the same pace as the labour force, maintaining a steady 5% unemployment rate. However, youth unemployment remained stubbornly high at 12.6%, with low-income nations struggling most to create quality jobs.
CHALLENGES IMPACTING LABOUR MARKETS
The report from ILO identifies several key issues hindering recovery:
- Geopolitical tensions: Heightened global conflicts are destabilizing economies.
- Rising climate costs: Natural disasters and climate adaptation expenses are straining resources.
- Debt crises: Many nations face unresolved debt burdens, further squeezing job markets.
Economic growth slowed to 3.2% in 2024, down from 3.3% in 2023 and 3.6% in 2022. A similar growth rate is forecasted for 2025, with a gradual decline anticipated over the medium term.
INFLATION ERODES WAGES
Although inflation eased in 2024, it remained elevated, diminishing wage value. Real wage gains occurred in some advanced economies. Yet most nations are still dealing with the pandemic’s lingering effects. They are also facing rising costs of living.
DECLINE IN LABOUR FORCE PARTICIPATION
Labour force participation has dropped, especially among young people in low-income countries. In contrast, high-income nations saw increases among older workers and women. Yet, gender disparities persist, with fewer women in the workforce, curbing overall progress.
A concerning trend is the rise in young people classified as NEET (Not in Education, Employment, or Training).
- Low-income countries: NEET rates for young men reached 20.4% (15.8 million), while young women hit 37% (28.2 million).
- Global figures: In 2024, 85.8 million young men (13.1%) and 173.3 million young women (28.2%) were NEET.
GLOBAL JOBS GAP PERSISTS
The global jobs gap—the total number of individuals wanting work but unable to find it—stood at 402 million in 2024. This includes:
- Unemployed workers: 186 million
- Temporarily unavailable workers: 137 million
- Discouraged workers: 79 million
While the gap has narrowed since the pandemic, it is expected to stabilize over the next two years.
GREEN AND DIGITAL SECTORS OFFER NEW OPPORTUNITIES
Despite the challenges, green energy and digital technologies present promising job growth opportunities:
- Renewable energy jobs: These reached 16.2 million globally, driven by investments in solar and hydrogen power. Yet, nearly half of these jobs are concentrated in East Asia.
- Digital advancements: While offering immense potential, many countries lack the infrastructure and workforce skills to harness these opportunities fully.
SOLUTIONS FOR A SUSTAINABLE FUTURE
ILO Director-General Gilbert F. Houngbo emphasized the urgency of tackling these challenges. “Decent work and productive employment are vital for achieving social justice and the Sustainable Development Goals,” he said.
The report outlines key strategies to strengthen labour markets:
- Boost productivity: Invest in education, skills training, and infrastructure to drive economic growth.
- Expand social protection: Improve access to social security and enforce safe working conditions to reduce inequality.
- Utilize private funds: Leverage remittances and diaspora investments to foster local development in low-income countries.
