The International Labour Organization (ILO) has issued a stark warning about the global employment landscape in 2024. The latest report, World Employment and Social Outlook Trends 2024, projects a surge in global unemployment, accompanied by escalating inequality and sluggish productivity.
CURRENT UNEMPLOYMENT STATUS
As of now, just over five percent of the global workforce is unemployed, a figure revealed by the ILO’s 2024 report. Notably, both the unemployment rate and the jobs gap rate have fallen below pre-pandemic levels. The 2023 global unemployment rate marked a modest improvement at 5.1 percent, down from 5.3 percent in 2022.
FRAGILITY LURKING BENEATH
Despite these seemingly positive indicators, the report uncovers underlying fragility. It anticipates a worsening labour market outlook in 2024, with an additional two million workers expected to seek employment. This projection would elevate the global unemployment rate from 5.1 percent in 2023 to 5.2 percent. The report also highlights a decline in disposable incomes in the majority of G20 countries, coupled with an erosion of living standards unlikely to be quickly compensated.
DISPARITIES BETWEEN COUNTRIES
Crucial disparities persist between higher and lower-income countries. In 2023, the jobs gap rate in high-income countries was 8.2 percent, contrasting sharply with the 20.5 percent rate in low-income countries. Similarly, while the unemployment rate in high-income nations stood at 4.5 percent, it spiked to 5.7 percent in low-income countries.
LINGERING WORKING POVERTY
Working poverty is expected to persist, with the number of workers living in extreme poverty increasing by about one million in 2023. The report also reveals an uptick in the number of workers living in moderate poverty by 8.4 million in the same year.
WIDENING INCOME INEQUALITY
The WESO Trends report warns of widening income inequality, indicating that the erosion of real disposable income could adversely impact aggregate demand and impede a sustained economic recovery.
CHALLENGES IN THE LABOR MARKET
Rates of informal work are projected to remain stable, accounting for around 58 percent of the global workforce in 2024. The return to pre-pandemic labour market participation rates varies among different groups, with women’s participation rebounding quickly but still facing gender gaps, especially in emerging and developing nations. Youth unemployment rates, particularly the NEET (Not in Employment, Education, or Training) category, remain high, posing challenges for long-term employment prospects.
PRODUCTIVITY SLOWDOWN
After a brief post-pandemic boost, labour productivity has returned to the low levels seen in the previous decade. The report highlights a slowdown in productivity growth, attributing it to factors such as investment in less productive sectors, skills shortages, and the dominance of large digital monopolies hindering technological adoption.
UNCERTAIN OUTLOOK
ILO Director-General, Gilbert F. Houngbo, expresses deep concern, stating, “It is starting to look as if these imbalances are not simply part of pandemic recovery but structural.” The report emphasizes that these workforce challenges pose a threat to individual livelihoods and businesses, calling for effective and swift action to address falling living standards, weak productivity, inflation, and growing inequality.
“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,” he said.