Economic slowdown portends worsening working conditions

Global employment will grow by only 1% in 2023, leaving 208 million people out of work. Young people and women will lose out

© OIT/Marcel Crozet  -   A street vendor sells eggs in Diego-Suarez, Madagascar

The International Labour Organization (ILO) expects global employment to grow by just 1%, less than half of the growth recorded in 2022.

In the ILO's World Employment and Social Outlook: Trends 2023, the ILO also forecasts that global unemployment will increase slightly in 2023, by about three million to 208 million unemployed, for a global unemployment rate of 5.8%.

However, this figure rises to 473 million unemployed when including people who want to work but are not actively seeking employment, either because of lack of motivation or because they have other obligations to fulfil, in particular caring responsibilities.

This modest projected increase is largely due to low labour supply in high-income countries. As a result, 16 million more people will remain unemployed globally than in the pre-pandemic crisis baseline period.

In addition, the economic slowdown will force more workers to accept lower quality, low-paid jobs that lack job security and social protection, thus exacerbating the inequalities exacerbated by the COVID-19 crisis.

These jobs will often be underpaid, the report says, and sometimes lack the necessary working hours.

More poverty

Moreover, with prices rising faster than nominal labour income, the cost-of-living crisis will increase the number of people living in poverty. This comes on top of the large drop in incomes during the COVID-19 crisis, which in many countries hit low-income groups hardest.

The worsening labour market situation is mainly due to new geopolitical tensions and the conflict in Ukraine, as well as the uneven recovery from the pandemic and frequent disruptions in global supply chains.

This has led to stagflation, which combines high inflation and insufficient economic growth for the first time since the 1970s.

Women and young people hit hardest

The situation of women and young people in the labour market is particularly adverse. Globally, the labour force participation rate for women will reach 47.4% in 2022, compared to 72.3% for men. This difference of 24.9 percentage points means that for every economically inactive man, there are two women in the same situation.

For their part, young people aged 15 to 24 face serious difficulties in finding and keeping a decent job. Their unemployment rate is three times higher than that of adults. More than one in five young people, i.e. 23.5%, are not working, studying or participating in any training programme, the so-called "nini".

Against this background, ILO Director-General Gilbert F. Houngbo said that "the need to promote decent work and social justice is clear and pressing".

Overcoming all these challenges, he said, requires collaboration to facilitate the establishment of a new social contract at the global level.

"The ILO will advocate for a Global Coalition to promote social justice in order to build the necessary support, formulate the relevant policies and lay the foundations for the future of work," he said.

For his part, Richard Samans, Director of the Research Department and coordinator of the report, noted the great concern about the slower pace of productivity growth, which is essential to address crises related to purchasing power, ecological sustainability and well-being.

The labour market by region

Africa and the Arab States are expected to see employment growth of at least $3 by 2023. However, given their growing working-age populations, unemployment rates in both regions can be expected to decline only slightly (from 7.4 to 7.3% in Africa, and from 8.5 to 8.2% in the Arab States).

In Asia and the Pacific, as well as in Latin America and the Caribbean, annual employment growth is expected to be around 1%, while in North America, employment growth will be very slight or non-existent in 2023, with a pick-up in unemployment, according to the report.

Finally, Europe and Central Asia are particularly affected by the economic effects of the conflict in Ukraine. However, while employment is projected to decline in 2023, the unemployment rate in the region can be expected to rise only slightly, given the insufficient increase in the working-age population.