Global Unemployment Rate to Increase in 2024, Says ILO Report

January 11, 2024 thehrobserver-hrobserver-Unemployment

The ILO projects that the labour market outlook and global unemployment will both worsen in 2024  withan extra two million workers are expected to be looking for jobs, raising the global unemployment rate from 5.1% in 2023 to 5.2%.

According to a new report by the International Labour Organization (ILO), disposable incomes have declined in the majority of G20 countries and, generally, the erosion of living standards resulting from inflation is, “unlikely to be compensated quickly.”

The report says that the labour markets have shown surprising resilience despite deteriorating economic conditions, but recovery from the pandemic and multiple crises are eroding prospects for greater social justice.

The ILO’s World Employment and Social Outlook Trends: 2024  finds that both the unemployment rate and the jobs gap rate, which is the number of people without employment who are interested in finding a job, have fallen below pre-pandemic levels.

The 2023 global unemployment rate stood at 5.1%, a modest improvement from 2022 when it stood at 5.3%.

The jobs gap rate in 2023 was 8.2% in high-income countries, it stood at 20.5% in the low-income group. Similarly, while the 2023 unemployment rate persisted at 4.5% in high-income countries, it was 5.7% in low-income countries.

The return to pre-pandemic labour market participation rates depends on the group, the report explains. Women’s participation has bounced back more; however, there remains to be a gender gap, especially in emerging and developing nations. Youth unemployment rates continue to present a challenge, said the report. 

“The rate of people defined as NEET (Not in Employment, Education or Training) remains high, especially among young women, posing challenges for long-term employment prospects,” wrote the ILO.

The report also found that people who have re-entered the labour market post-pandemic tend not to be working the same number of hours as before while the number of sick days taken has increased significantly.

“The workforce challenges it [the report] detects a threat to both individual livelihoods and businesses and it is essential that we tackle them effectively and fast. Falling living standards and weak productivity combined with persistent inflation create the conditions for greater inequality and undermine efforts to achieve social justice. And without greater social justice we will never have a sustainable recovery,” said ILO Director-General, Gilbert F. Houngbo.

The ILO said that working poverty is likely to “persist” despite quickly declining after 2020. The number of workers living in extreme poverty (earning less than US$2.15 per person per day in purchasing power parity terms) grew by about 1 million in 2023. Meanwhile, the number of workers living in moderate poverty (earning less than US$3.65 per day per person in PPP terms) increased by 8.4 million in 2023.

|Income inequality has also widened, the WESO Trends warns, adding that the erosion of real disposable income, bodes ill for aggregate demand and a more sustained economic recovery,” wrote the ILO.

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