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Unemployment and the employment gap have fallen below pre-pandemic levels, but global unemployment will increase in 2024, and rising inequalities and Productivity stagnation are causes for concern, according to ILO report
«World Social and Employment Outlook: Trends 2024».

Labor markets have shown surprising resilience to
Despite deteriorating economic conditions, but pandemic recovery continues
remains unequal as new vulnerabilities and multiple crises are eroding the
prospects for greater social justice, according to a new report from the Organization
International Labor Organization (ILO).

The World Employment Outlook and Social Outlook: Trends 2024 report
(WESO Trends) of the ILO concludes that both the unemployment rate and the wage gap rate
employment – ​​which is the number of unemployed people who are interested in finding a job
jobs – have fallen below pre-pandemic levels. The rate of
Global unemployment in 2023 stood at 5.1%, representing a modest improvement with
compared to 2022, when it stood at 5.3%. The global employment gap and unemployment rates
Labor market participation also improved in 2023.

However, below these figures, a fragility begins to emerge, according to the report. HE
Both the labor market outlook and global unemployment are expected to worsen.
In 2024, two million more workers are expected to seek employment, which would raise the
global unemployment rate from 5.1% in 2023 to 5.2%. Disposable income has decreased
in most G20 countries and, in general, the resulting erosion of living standards
of inflation “is not likely to be offset quickly.”

Furthermore, important differences persist between high- and low-income countries. While
The employment gap rate in 2023 was 8.2% in high-income countries, it was in the
20.5% in the low income group. Similarly, while the unemployment rate in 2023
It remained at 4.5% in high-income countries, it was 5.7% in low-income countries.

Furthermore, working poverty is likely to persist. Despite decreasing
rapidly after 2020, the number of workers in extreme poverty
(who earn less than $2.15 per person per day in power parity terms
purchasing power) increased by nearly one million in 2023; the number of workers in situation
of moderate poverty (earning less than $3.65 per person per day in terms of
purchasing power parity) increased by 8.4 million in 2023.

Income inequality has also increased, the study warns, adding that the erosion
of real disposable income “bodes badly for aggregate demand and a recovery
more sustained economy.

Informal work rates are expected to remain static, representing around
58% of the global workforce in 2024.

Labor market imbalances
The return to pre-pandemic labor market participation rates has
varied between different groups. Women’s participation has recovered
rapidly, but a notable gender gap still persists, especially in nations
emerging and developing. Youth unemployment rates continue to pose a challenge. Rate
of people defined as NEET (that is, they do not study or work
nor do they receive training) remains high, especially among young women, which
poses challenges to long-term employment prospects.
The report also confirms that people who have re-entered the labor market
After the pandemic they tend not to work the same number of hours as before, while the
number of sick leave days has increased significantly.

Slowing productivity growth
After a brief post-pandemic boost, labor productivity has returned to the low level of the
previous decade. The report also notes that, despite technological advances and the
increasing investment, productivity growth has continued to slow. One of
The reasons are that significant amounts of investment have been allocated to less
productive, such as services and construction. Other obstacles are the shortage of labor
skilled labor and the dominance of the large digital monopolies, which prevents adoption
fastest pace of technology, especially in developing countries and in sectors with
predominance of low productivity companies.

Uncertain prospects
“This report looks beyond the headline labor market figures and what it reveals should
be a cause for great concern. It is beginning to appear that these imbalances are not
simply part of the pandemic recovery, but structural,” declared the Director
ILO General, Gilbert F. Houngbo. «The labor problems that it detects mean
a threat to both individual and business livelihoods, and it is essential
that we address them effectively and quickly. The decline in the standard of living and the scarcity
productivity, combined with persistent inflation, create the conditions for a
greater inequality and undermine efforts to achieve social justice. And without a major
social justice we will never have a sustainable recovery.