Global Employment at a Crossroads: Millions Trapped in Poverty as AI and Uncertainty Loom
The world of work is facing a critical juncture. A new report from the International Labor Institution (ILO) paints a sobering picture: nearly 300 million workers globally are trapped in extreme poverty, earning less than $3 a day. While global unemployment rates appear stable,progress towards decent work has stalled,and emerging challenges like artificial intelligence (AI),trade policy uncertainty,and demographic shifts threaten to exacerbate existing vulnerabilities.this isn’t just an economic issue; it’s a human one, impacting livelihoods, social stability, and the potential for a more equitable future.
The Persistence of Poverty and informality
Despite some resilience in overall unemployment figures – projected at 4.9% in 2026, equivalent to 186 million people – the ILO’s Employment and Social Trends 2026 report reveals a deeper,more troubling reality. Millions worldwide lack access to quality jobs, and the gap between those with decent work and those without is widening. A meaningful driver of this disparity is the rise of informality.
By 2026, an estimated 2.1 billion workers will be employed in the informal sector. This means limited or no access to social protection, fundamental labor rights, and job security. Informal work often lacks benefits like health insurance, paid leave, and safe working conditions, leaving workers vulnerable to economic shocks and exploitation. This trend is notably acute in low-income countries, where workers already facing the moast challenging conditions are being left further behind.
Youth Unemployment: A Growing Crisis
Young people are disproportionately affected by the lack of decent work opportunities. In 2025, youth unemployment reached 12.4%, leaving approximately 260 million young people not in education, employment, or training (NEET). The situation is particularly dire in low-income countries, where nearly 28% of young people fall into the NEET category. this represents a significant loss of potential and a risk of long-term social and economic consequences.
Adding to these challenges is the accelerating adoption of AI and automation. while these technologies offer potential benefits, they also pose a threat to entry-level jobs traditionally held by young people, particularly those with higher education seeking opportunities in skilled occupations. The need for reskilling and upskilling initiatives to prepare the next generation for the future of work has never been more urgent.
The Impact of AI and Automation
The rise of AI isn’t a distant threat; it’s actively reshaping the job market. While AI is expected to create new jobs,these frequently enough require specialized skills that many workers,especially young people,currently lack. The ILO report highlights the need for proactive policies to mitigate the negative impacts of automation and ensure a just transition for workers. This includes investing in education and training programs, strengthening social safety nets, and exploring innovative approaches to income support.
Gender Inequality Persists
Despite progress in some areas, women continue to face significant barriers to full and equal participation in the labor force. They represent only two-fifths of global employment and are 24% less likely than men to be employed. These disparities are rooted in deeply ingrained social norms and stereotypes that limit women’s access to education, training, and leadership opportunities.
Progress in female labor force participation has stalled, hindering efforts to achieve gender equality at work.Addressing this requires a multi-faceted approach, including policies that promote equal pay, affordable childcare, and flexible work arrangements, and also challenging discriminatory attitudes and practices.
Demographic Shifts and Regional Variations
Global demographic trends are also influencing labor market dynamics. In richer economies, aging populations are leading to slower labor force growth, as fewer people are available to enter or remain in employment. Conversely, low-income countries are grappling with rapid population growth, wich, without sufficient job creation, can exacerbate poverty and unemployment.
Regional variations are also significant. Employment growth is projected to be strongest in low-income countries (3.1% in 2026), but even this growth may not be enough to absorb the increasing number of job seekers. Upper-middle-income countries are expected to see modest growth (0.5%), while the outlook for lower-middle-income economies is more promising (1.8%).
Trade Disruptions and the green Transition
Global trade disruptions, fueled by geopolitical tensions and supply chain bottlenecks, are adding another layer of uncertainty to labor markets. These disruptions can lead to wage stagnation and job losses, particularly in sectors heavily reliant on international trade. Though, trade remains a vital source of employment, supporting 465 million workers worldwide, with Asia and the Pacific being the most heavily impacted region.
The transition to a greener economy presents both challenges and opportunities.While it requires significant investment and structural changes, it also has the potential to create new jobs in renewable energy, sustainable agriculture, and other green sectors. Asia and the pacific, particularly vulnerable to climate change, is increasingly incorporating green jobs into its national progress strategies.
Looking Ahead: A Call for Action
The ILO’s report serves as a stark warning: the world is falling behind in its efforts to achieve decent work for all. Addressing this requires a concerted effort from governments, employers, and workers to prioritize policies that promote inclusive growth, invest in human capital, and mitigate the risks associated with technological change and global uncertainty.
Key Takeaways:
- Nearly 300 million workers live in extreme poverty, earning less than $3 a day.
- Informality is rising, leaving billions of workers without social protection or job security.
- Youth unemployment remains a critical challenge, exacerbated by AI and automation.
- Gender inequality persists, hindering women’s full participation in the labor force.
- Global trade disruptions and demographic shifts add further complexity to the labor market.
The future of work is not predetermined.By embracing proactive policies and investing in people, we can create a more just and sustainable world where everyone has the possibility to earn a decent living and reach their full potential. The time for action is now.
Published in Dawn, January 15th, 2026
