Economic slowdown increases lower-quality jobs, ILO warns

The current slowdown in the world economy forces more workers to accept low-paid, precarious jobs and devoid of social protection, accentuating the inequalities exacerbated by the COVID-19 crisis, the International Labor Organization (ILO) warned on Monday.

The ILO also forecasts a slight increase in global unemployment this year, of around three million people, to reach 208 million (global unemployment rate of 5.8%), marking a reversal of the decline observed from 2020 to 2022.

In addition, due to inflation, as prices rise faster than nominal earnings from work, more people could be thrown into poverty, according to the ILO’s annual report on employment.

This trend is added to the significant drops in income observed during the COVID-19 crisis.

New geopolitical tensions, the conflict in Ukraine, the uneven recovery from the pandemic and the persistence of bottlenecks in global supply chains have given rise to “to a situation of stagflation, which simultaneously combines high inflation and insufficient economic growth, for the first time since the 1970s“, according to the report.

“Forecasts of a slowdown in economic growth and employment in 2023 imply that most countries will not return to pre-pandemic levels”, emphasizes the general director of the ILO, Gilbert Hungboin the foreword to the report.

Job growth should clearly slow this year, by 1% (versus 2.3% in 2022), a significant downward revision of 0.5 percentage point from the previous forecast.

“The slower pace of global employment means that the losses incurred during the COVID-19 crisis are unlikely to be made up before 2025″, indicated the director of the investigation department of the ILO and coordinator of the report, Richard Samans, in a statement.

Unemployment should, however, recover only moderately this year, as much of the blow will be absorbed by rapidly declining real wages in a context of accelerating inflation, rather than job cuts, the ILO explains.

informal employment

The report identifies a new global measure of unmet employment needs: “the global jobs deficit”.

In addition to unemployed people (205 million in 2022), this measure includes people who want to work but are not actively looking for a job (268 million), either because they are discouraged or because they have other responsibilities, for example of a family nature.

Last year, the global job deficit reached 473 million, or more than in 2019. This job deficit is particularly important in the case of women and in developing countries.

“As a result of the current slowdown, many workers will be forced to accept lower-quality jobs, often poorly paid and, at times, without the necessary working hours”, indicates the ILO.

People between the ages of 15 and 24 face particularly serious difficulties in finding and keeping decent employment. Their unemployment rate is three times higher than that of adults.

Despite the general slowdown, some countries and sectors remain exposed to a risk of a shortage of skilled labor.

The ILO then calls for a clear increase in investment in education and training when “two thirds of the world’s active youth lack basic skills.”

According to the report, the recovery of the labor market after the COVID-19 crisis was mainly fueled by informal employment.

In 2022, some 2,000 million workers had informal employment and 214 million lived in extreme poverty (with an income of less than 1.90 dollars a day), or 6.4% of the employed assets.

Source: AFP