Unemployment, inequality, stagnant productivity: Triple threats engulfing global labour market

Last updated on January 13th, 2024 at 06:42 am

Global unemployment is expected to rise in 2024, the International Labour Organisation noted in a recent report, highlighting growing inequality and stagnant productivity as a couple more causes for concern on the economic horizon.

The UN labour agency said just over 5% of the global workforce is currently looking for a job. This is a better situation than before the COVID-19 pandemic, but it isn’t set to last as an extra 2 million people are expected to be on job hunt over the next 12 months, it added.

In addition to the uncertain jobs market outlook, the ILO also noted that the majority of the richest countries had seen living standards eroded because of inflation, a factor that is now in decline in several major economies across the globe.

ILO report highlights notable differences

The agency experts also highlighted big disparities in the labour market, stressing there are major differences between higher and lower income countries. The jobs gap rate (the number of jobless looking for work) in 2023 was 8.2% in richer nations, and 20.5% in poorer countries.

Similarly, the 2023 unemployment rate struck 4.5% for richer countries and 5.7% for low-income ones. ILO Director-General Gilbert Houngbo said falling living standards and lesser productivity, in addition to inflation, have been undermining efforts to achieve social justice.

Trends show income inequality has also widened. Despite quickly dropping after 2020, the number of workers living in extreme poverty (earning less than $2.15 per person per day) increased by about a million in the past year.

Uneven post-pandemic recovery in focus

In terms of other findings, despite several policy initiatives to manage the underground economy, the number of people employed informally is expected to remain static, accounting for roughly 58% of the global workforce in 2024.

Last May, COVID-19 stopped being called a public health emergency, but the aftershocks are still being felt, the ILO report noted. Residual symptoms and health problems for those 20% or so who suffered ‘long COVID’ persist for many and have impacted productivity.

Post-pandemic, several people tend not to be working the same number of hours, and the number of sick days taken has also increased significantly. Moreover, despite increased investments and technological advances, productivity growth has continued to slow.