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The Geneva-based UN institution attributes this slight increase to the rise in unemployment in advanced economies. While job growth has proven robust and the unemployment rate has reached an all-time low, the ILO jobs report notes that an additional two million workers are expected to be looking for work in 2024.
“Due to the decline in participation rates and the slowdown in employment growth, there will certainly be a slight increase of 0.1%, but that is still 2 million unemployed in the world,” he explained the ILO.
A global unemployment rate of 5.2%, compared to 5.1% in 2023
The global unemployment rate will therefore rise to 5.2% this year, compared to 5.1% in 2023.
“Although weakening, the global employment gap remained high in 2023, exceeding 434 million,” the ILO explained.
The erosion of living standards caused by inflation is unlikely to be quickly offset
“We expect a slight decline in the performance of labor markets, partly because growth is slowing globally,” said Richard Samans, director of the ILO’s research department.
In most G20 countries, disposable incomes have fallen and, in general, the erosion of living standards caused by inflation is unlikely to be quickly offset. The erosion of real wages and living standards due to persistently high inflation rates and rising housing costs is unlikely to reverse any time soon.
“This report looks at key labor market figures and the findings therein should raise serious concerns. It appears that these imbalances are not simply related to the resurgence of the pandemic, but are structural in nature,” ILO Director-General Gilbert F. Houngbo said in a statement.
Foreign workers cut steel at a construction site in the United Arab Emirates.
Low employment growth is expected in upper middle-income countries
After a brief growth spurt as countries recovered from the pandemic, overall labor productivity growth quickly returned to the slow pace of the previous decade.
The report said that job growth is expected to be weak in upper-middle-income countries over the next two years, but job gains in low- and lower-middle-income countries will remain robust.
Under these conditions, these numbers show fragility, says the report, which predicts that both the labor market outlook and global unemployment will worsen. Among other things, youth unemployment continues to hinder the acceleration of structural adjustment and the labor market.
“The situation is particularly worrying in high-income countries, where employment growth is expected to turn negative in 2024 and only modest improvements are expected in 2025,” the ILO stressed.
More than a million “poor” workers in a year
In fact, significant disparities remain between high- and low-income countries. While the employment gap in 2023 was 8.2% in high-income countries, it was 20.5% in the low-income group. While the unemployment rate in 2023 remains at 4.5% in high-income countries, it is 5.7% in low-income countries.
Without greater social justice, a sustainable recovery will never occur
Furthermore, the ILO report points out that income inequality has also increased, adding that the erosion of real disposable income “does not bode well for aggregate demand and a more sustainable economic recovery.”
Despite a rapid decline after 2020, the number of workers living in extreme poverty (earning less than $2.15 per person per day in purchasing power parity terms) increased by around $1 million per day in 2023 day and person) increased by 8.4 million in 2023. A decline was only seen in upper-middle income countries.
High rates of women who neither have a job nor are in school or vocational training
On the positive side, informality rates have returned to pre-pandemic levels, although the number of informal workers has increased to 2 billion due to the increase in the global workforce. In 2024, informal labor rates are expected to remain stable, accounting for about 58% of the global workforce.
Returns to pre-pandemic labor force participation rates varied by group. The proportion of people not in employment, education or training remains high, particularly among young women, affecting long-term employment prospects.
The report also says that people who have re-entered the workforce after the pandemic tend to no longer work as many hours as before, while the number of sick days has increased significantly.
For the ILO, the gap created by the pandemic must be filled quickly with targeted skills initiatives to prevent employment resilience from eroding.
“Declining living standards and low productivity, combined with persistent inflation, are creating the conditions for greater inequality and undermining efforts for social justice. And without greater social justice, we will never see a lasting recovery,” Mr Houngbo concluded.
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