The World Employment and Social Outlook Trends: 2024 (WESO Trends), released by the ILO, reports that both the unemployment rate and the jobs gap rate, representing the number of individuals seeking employment, have decreased to levels lower than those before the pandemic. In 2023, the global unemployment rate was 5.1%, showing a slight improvement from 5.3% in 2022. Additionally, there were improvements in global jobs gap and labor market participation rates during 2023.
However, the report identifies emerging fragility beneath these statistics. It anticipates a deterioration in both the labor market outlook and global unemployment rates. In 2024, an additional two million individuals are forecasted to seek employment, leading to a rise in the global unemployment rate from 5.1% in 2023 to 5.2%. Disposable incomes have decreased in most G20 nations, and the erosion of living standards due to inflation is expected to persist without swift compensation.
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.
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
Labour market imbalances
The recovery of labor market participation rates to pre-pandemic levels has been uneven across different demographics. While women's participation has rebounded swiftly, a significant gender gap persists, particularly in emerging and developing countries. Youth unemployment rates remain problematic, with a high proportion classified as NEET (Not in Employment, Education, or Training), especially among young women, which poses obstacles to their long-term employment prospects.
Productivity growth slowed
Following a temporary rise post-pandemic, labor productivity has reverted to the low levels observed in the previous decade. Notably, despite advancements in technology and heightened investment, productivity growth has persisted in decelerating. One contributing factor to this trend is the allocation of considerable investments toward sectors with lower productivity levels, such as services and construction. Additional obstacles include shortages in skills and the prevalence of large digital monopolies, which impede swifter adoption of technology.
Outlook uncertain
"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,” said ILO Director-General, Gilbert F. Houngbo. “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”.
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