Unemployment, the global employment landscape is poised to face increased challenges in the coming year, with the International Labour Organisation (ILO) painting a grim picture in its recent report, ‘ILO’s World Employment and Social Outlook Trends: 2024 (WESO Trends)’. The report, released yesterday, suggests that the world will witness a worsening unemployment situation, estimating that over two million individuals will find themselves without jobs. This projection is particularly concerning as it surpasses pre-pandemic levels, indicating a setback in global labor market recovery.
According to the findings, both the unemployment rate and the jobs gap rate, which measures the number of individuals without employment but actively seeking opportunities, have fallen below pre-pandemic levels. Despite some positive trends in 2023, the report forecasts an additional two million workers actively searching for jobs in 2024, leading to a marginal increase in the global unemployment rate from 5.1% in 2023 to 5.2%.
While there has been a modest improvement in the global unemployment rate from 5.3% in 2022 to 5.1% in 2023, the report underlines the uneven nature of the recovery from the pandemic. Surprisingly, labor markets have exhibited resilience amid deteriorating economic conditions, but new vulnerabilities and multiple crises continue to erode prospects for achieving greater social justice.
The report further highlights a decline in disposable incomes globally, with the erosion of living standards due to inflation unlikely to be quickly compensated. Moreover, the disparities between higher and lower-income countries persist, with the jobs gap rate in 2023 standing at 8.2% in high-income countries and a staggering 20.5% in low-income countries. Similarly, the unemployment rate in 2023 was 4.5% in high-income countries, contrasting with 5.7% in low-income countries, indicating significant economic disparities.
Notably, the report sounds an alarm regarding the persistence of working poverty and its adverse effects on individuals living in extreme poverty (earning less than $2.15 per person per day) and moderate poverty (earning less than $3.65 per day per person). Despite a decline in extreme poverty after 2020, the number of workers in this category increased by about 1 million in 2023, while those in moderate poverty rose by 8.4 million during the same period.
The report also warns about the widening income inequality, emphasizing that the erosion of real disposable income has negative implications for aggregate demand and a sustained economic recovery. It predicts that rates of informal work will remain static, accounting for approximately 58% of the global workforce in 2024.
Presenting the report, ILO Director-General Gilbert Houngbo expressed concern over growing inequalities and stagnant productivity. He highlighted that labor market imbalances are escalating amid multiple global crises, posing a serious challenge to the pursuit of greater social justice and a just transition to a sustainable future.
This alarming scenario resonates with the Director-General of the Nigeria Employers’ Consultative Association (NECA), Adewale-Smatt Oyerinde, who sees the report as a reflection of the current global economic reality. Oyerinde emphasizes the potential double jeopardy for Nigeria if the government fails to take proactive steps to ensure enterprise sustainability, especially with organizations divesting due to unfavorable operating environments.
Conclusion
Unemployment
The report’s findings have prompted calls for urgent action by governments to mitigate the negative consequences. Oyerinde argues that firms leaving the country could exacerbate the unemployment situation, increase challenges of insecurity, and put additional pressure on households. He suggests that the government can address these issues by providing more support for organized businesses and creating a more hospitable business environment for both local and foreign investors. Oyerinde emphasizes the importance of focusing on skills development, as it not only sustains businesses but also empowers individuals to become employers of labor, thereby contributing to a reduction in unemployment from both ends.
