The global labour market is facing a bleak outlook for 2024, as an extra two million workers are expected to join the ranks of the unemployed, according to a new report by the International Labour Organization (ILO).
The report, titled World Employment and Social Outlook Trends: 2024 (WESO Trends), projects that the global unemployment rate will increase from 5.1 per cent in 2023 to 5.2 per cent in 2024, reversing the modest improvement seen in the previous year.
The report also finds that the labour market recovery from the pandemic has been uneven and fragile, with significant disparities between higher and lower income countries, as well as between different groups of workers.
While both the unemployment rate and the jobs gap rate – which measures the number of persons without employment who are interested in finding a job – have fallen below pre-pandemic levels, the report warns that these indicators mask the underlying weaknesses of the labour market.
One of these weaknesses is the decline of disposable incomes in the majority of G20 countries, which has eroded the living standards of workers and consumers. The report notes that the inflationary pressures caused by the pandemic are unlikely to be compensated quickly, and that this bodes ill for aggregate demand and a more sustained economic recovery.
Another weakness is the persistence of working poverty, especially in low-income countries. The report estimates that the number of workers living in extreme poverty (earning less than $2.15 per person per day in purchasing power parity terms) grew by about 1 million in 2023, while the number of workers living in moderate poverty (earning less than $3.65 per day per person in PPP terms) increased by 8.4 million.
The report also highlights the widening income inequality, both within and between countries, as a result of the pandemic. It points out that the jobs gap rate in 2023 was 8.2 per cent in high-income countries, but 20.5 per cent in the low-income group. Similarly, the unemployment rate in 2023 was 4.5 per cent in high-income countries, but 5.7 per cent in low-income countries.
The report further reveals that the rates of informal work, which are typically associated with lower wages, lower social protection and lower labour rights, are expected to remain static, accounting for around 58 per cent of the global workforce in 2024.
The report also analyses the trends in labour productivity, which is a key driver of economic growth and social development. It finds that after a brief post-pandemic boost, labour productivity has returned to the low level seen in the previous decade.
“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.
