Global employment projected to expand by 1% in 2023: ILO report

The global outlook for labour markets significantly deteriorated last year and the risk of a global debt crisis, therefore, looms large, jeopardising the fragile recovery in many frontier markets, according to a recent report by the International Labour Organisation (ILO). Global employment is projected to expand by 1 per cent in 2023, a significant deceleration from last year’s 2.3 per cent.

This projection for 2023 is a notable downward revision of 0.5 percentage points from the previous projection. No major improvement is projected for 2024, when employment growth is expected to have edged up to 1.1 per cent.

The 2022 global outlook for labour markets significantly deteriorated and the risk of a global debt crisis, therefore, looms large, jeopardising the fragile recovery in many frontier markets, says an International Labour Organisation report, which estimates global employment will expand by 1 per cent in 2023, a major deceleration from 2022’s 2.3 per cent.

The outlook is pessimistic for high-income countries, with close to zero employment growth. By contrast, low-income and lower-middle-income countries are projected to see employment growth surpassing their pre-pandemic growth trend, the report says.

Policymakers face a challenging trade-off as they deal with elevated inflation amid incomplete jobs recovery, it notes.

Emerging geopolitical tensions, the Ukraine conflict, an uneven recovery from the pandemic and ongoing bottlenecks in supply chains have created the conditions for a stagflationary episode, the first period of simultaneously high inflation and low growth since the 1970s, says World Employment and Social Outlook: Trends 2023.

Most countries have not yet returned to the levels of employment and hours worked seen at the end of 2019, before the outbreak of the COVID-19 health crisis. Yet, a series of supply shocks, predominantly in food and commodities markets, have raised producer prices, causing spikes in consumer price inflation and pushing major central banks into a more restrictive policy stance, it says.

In the absence of corresponding increases in labour incomes, the cost-of-living crisis directly threatens the livelihoods of households and risks depressing aggregate demand. Many countries have accumulated a significant amount of debt, in part to address the severe fallout from the pandemic, it says.

Persistent disruptions to supply chains threaten employment prospects and job quality, especially in frontier markets, further reducing their prospects of a swift labour market recovery.

An environment of high and persistent uncertainty has emerged globally, depressing business investment, especially of small and medium-sized enterprises, eroding real wages and pushing workers back into informal employment, the report says.

The global jobs gap stood at 473 million people in 2022, corresponding to a jobs gap rate of 12.3 per cent. It consists of the 205 million unemployed—corresponding to an unemployment rate of 5.8 per cent—and 268 million people who have an unmet need for employment but are outside the labour force as they do not satisfy the criteria to be considered unemployed.

This jobs gap is particularly large for women and in developing countries. Although men and women currently face similar global unemployment rates, the jobs gap for women is 15 per cent compared with 10.5 per cent for men, the report says.

Overall, only 47 per cent of people worldwide are effectively covered by at least one social protection benefit, meaning that more than 4 billion people still lack any social protection. In 2022, an estimated 214 million workers were living in extreme poverty—earning less than $1.90 per day per person in purchasing power parity terms—corresponding to around 6.4 per cent of employed people, the report adds.

Fibre2Fashion News Desk (DS)

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