Faltering global employment growth and the pressure on decent working conditions risk undermining social justice, according to the ILO’s World Employment and Social Outlook: Trends 2023 report.

The current global economic slowdown is likely to force more workers to accept lower quality, poorly paid jobs that lack job security and social protection, so accentuating inequalities exacerbated by the COVID-19 crisis, according to a new International Labor Organization (ILO) report.

According to the ILO’s Global Employment and Social Trends 2023 survey, the global employment rate will grow by only 1 percent in 2023, which is less than half of the growth in 2022 The global unemployment rate is 5.8 percent and is expected to increase by approximately 3 million to 208 million in 2023. The moderate size of this projected increase is largely due to the tight labor supply in high-income countries. This would mark a reversal of the decline in global unemployment seen between 2020 and 2022. Currently, the global unemployment rate is 16 million more than the pre-crisis level in 2019.

In addition to unemployment, the report emphasizes that paying special attention to the quality of jobs will be a fundamental condition for promoting decent work and strengthening social justice. A decade of progress in poverty reduction faltered during the COVID-19 crisis. Despite a nascent recovery during 2021, the continuing shortage of better job opportunities is likely to worsen, the study says.

The current slowdown means that many workers will have to accept lower-quality jobs, often at very low pay, sometimes with insufficient hours. Furthermore, as prices rise faster than nominal labor incomes, the cost-of-living crisis risks pushing more people into poverty. This trend comes on top of significant declines in income seen during the COVID-19 crisis, which in many countries affected low-income groups worst.

The report also identifies a new, comprehensive measure of the unmet need for employment – the global jobs gap. As well as those who are unemployed, this measure includes people who want employment but are not actively searching for a job, either because they are discouraged or because they have other obligations such as care responsibilities. The global jobs gap stood at 473 million in 2022, around 33 million above the level of 2019.

STAGFLATION CONDITIONS THREATEN PRODUCTIVITY AND LABOR MARKET RECOVERY

The labor market deterioration is mainly due to emerging geopolitical tensions and the Ukraine conflict, uneven pandemic recovery, and continuing bottlenecks in global supply chains, the WESO Trends says. Women and young people are faring significantly worse in labor markets. Globally, the labor force participation rate of women stood at 47.4 percent in 2022, compared with 72.3 percent for men. This 24.9 percentage point gap means that for every economically inactive man, there are two such women.

Young people aged 15 to 24 face severe difficulties in finding and keeping decent employment. Their unemployment rate is three times that of adults. More than one-in-five or 23.5 percent of young people are not in employment, education, or training.

General Director of the ILO, Gilbert F.Houngbo said, “The need for more decent work and social justice is clear and urgent. But if we are to meet these multiple challenges we must work together to create a new global social contract. The ILO will be campaigning for a Global Coalition for Social Justice to build support, create the policies needed, and prepare us for the future of work.”

Director of the ILO’s Research Department and report coordinator, Richard Samans, highlighted, “The slowdown in global employment growth means that we don’t expect the losses incurred during the COVID-19 crisis to be recovered before 2025. The slowdown in productivity growth is also a significant concern, as productivity is essential for addressing the interlinked crises we face in purchasing power, ecological sustainability, and human well-being.”

SIGNIFICANT VARIATIONS IN REGIONAL 2023 LABOR MARKET PROSPECTS

In 2023 Africa and the Arab States should see employment growth of around 3 percent or more. However, with their growing working-age populations, both regions are likely to see unemployment rates decline only modestly. In Africa, unemployment rates decline from 7.4 to 7.3 percent, and 8.5 to 8.2 percent in the Arab States. In Asia and the Pacific and Latin America and the Caribbean, annual employment growth is projected to be around 1 percent. In Northern America there will be few or no employment gains in 2023 and unemployment will pick up, says the report. Europe and Central Asia are particularly hard hit by the economic fallout from the Ukraine conflict. But while employment is projected to decline in 2023, their unemployment rates should increase only slightly given the backdrop of limited growth in the working-age population.