By Dr. Gyan Pathak
Uncertainty in Global labour market is likely to continue while unemployment is set to rise in 2024. Growing inequality and stagnant productivity will also be cause of concern on the economic front, especially at a time when the global economy is on track for the slowest half-decade of growth in 30 years.
International Labour Organization’s (ILO’s) flagship report “World Employment and Social Outlook: Trend 2024” (WESO: Trends 2024) has said that the recent gains, which is a better situation than before the pandemic, in the labour market isn’t set to last, as an extra two million people are expected to be looking for a job over the next 12 months. Taking into consideration the new World Bank report predicting the global economy heading for slowest half-decade growth in the last three decades, ILO’s report certainly brings bad news for the labour market.
This year’s WESO: Trends provides a comprehensive assessment of the latest labour market trends, including unemployment, job creation, labour force participation and hours worked, while also linking with their social outcomes, and hence are most revealing when assessed its full significance of these developments – for both policy formation and the lives of individuals. For example, some of the data may seem encouraging, notably on growth and unemployment, a deeper analysis reveals that labour market imbalances are growing and that in the context of multiple and interacting global crises, this is eroding progress towards greater social justice, ILO Director General Gilbert F Houngbo has noted.
In addition to uncertain job market outlook WESO trends has noted that the majority of world’s richest nations had seen living standards eroded, because of inflation. Moreover, the erosion of living standards resulting from inflation is, “unlikely to be compensated quickly”, said the UN Agency.
ILO experts have underscored that there are significant differences between higher and lower income countries. While jobs gap rate (the number of jobless who are looking for work) in 2023 was 8.2 per cent in richer nations, it stood at 20.5 per cent in poorer countries. Similarly, while the 2023 unemployment rate stuck at 4.5 per cent for wealthier countries, it was 5.7 per cent in low-income countries.
“Falling living standards and weak productivity combined with persistent inflation create the condition for greater inequality and undermine efforts to achieve social justice. … and without greater social justice we will never have a sustainable recovery,” ILO DG has warned, while calling for tackling workforce challenges quickly and effectively.
Conditions of working poor also reported to be grim. The number of workers living in extreme poverty earning less than US$2.15 per person per day grew by about a million in 2023.
Income inequality has also widened, the trend shows, while noting that the erosion of real disposable income “bodes ill for aggregate demand and a more sustained economic recovery.” Despite various policy initiative to tackle the underground economy, the number of people employed informally is expected to remain static, accounting for around 58 per cent of the global workforce in 2024.
Post pandemic recovery in the labour market remains uneven, and aftershocks of COVID-19 are still being felt, says the report revealing that residual symptoms and health problems for those 20 per cent of so suffered long-COVID persist for many and have impacted productivity. Many who have re-entered the labour market post-pandemic tend not to be working the same number of hours while the number of sick days taken has increased significantly. Despite technological advances and increased investment, productivity growth has continued to slow. Additionally, a notable gender gap persists, especially in emerging and developing nations. Youth unemployment rates continue to present a challenge.
As for South Asia, the region is expected to have had the highest growth rate of 5 per cent in the region in 2023. Inflation accelerated including in Bangladesh, India, and Pakistan, and they had to implement import suppression measures and faced energy shortages both of which have been affecting industrial output. These countries also have limited fiscal room to provide stimulus to respond to exogenous shocks in the future, should that be required.
Though labour force participation trend in Asia and Pacific region returned to pre-pandemic downward trend in 2023, which was estimated to have been 60.9 per cent, it is expected to decrease in 2024 and 2025 to 60.5 and 60.4 respectively. Employment growth in the region has picked up, driven by job growth in South Asia. However, unemployment rate in the region is expected to remain constant over the next two years.
Youth unemployment continues to be a significant challenge for the region. The youth unemployment rate in 2023 is estimated to have been around 14.4 per cent, on average, marking a steady increase from 12 per cent in 2010 and less than 10 per cent in 2000. Youth continue to encounter decent work deficits, which exacerbate this age group’s pre-existing vulnerabilities.
Alongside the elevated and increasing unemployment rate in the region, informal employment affects more than 8 out of 10 young workers, and 1 in 4 young workers live in households subsisting below the moderate poverty threshold of US$3.65 per day in PPP terms. At the same time, more than 144 million youth in the region are NEET (not in employment, education or training), the majority of whom are women. NEET rates of young women are especially high in South Asia.
Nearly two thirds of total employment was informal in 2023. At 66 per cent their number is 1.3 billion in Asia-Pacific. South Asia has highest rate of informality with is at 87 per cent. India is obviously, being biggest with 1.42 billion population country, faces significant challenges on account of informality among workforce, especially when there are almost no social security coverage for them. New and non-standard form of works are also on the rise presenting new challenges. (IPA Service)
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