Global unemployment to rise despite unexpected rebound in 2023

The International Labour Organization (ILO) cast a cautious shadow over the global job market outlook on Wednesday, predicting a slight increase in unemployment in 2024 despite stronger-than-expected growth in 2023. The agency voiced concerns about a slowing economic recovery, widening inequalities, and the dampening effect of inflation on disposable income.

The UN’s labor agency acknowledged that the initial rebound from the COVID-19 pandemic has lost momentum, citing ongoing geopolitical tensions and central banks’ aggressive interest rate hikes to combat inflation as key stumbling blocks.

This was contained in its latest World Employment and Social Outlook Trends report released on Wednesday

However, the ILO also acknowledged some positive signals, noting that global growth in 2023 exceeded preliminary projections and labor markets displayed surprising resilience in the face of these headwinds.

The ILO’s revised forecast predicts a global unemployment rate of 5.2% in 2024, a minor increase from the 5.1% estimated for 2023. However, the agency emphasized that this seemingly minimal rise masks worrying regional disparities, with developing economies expected to experience a more pronounced job market slowdown.

Read Also: Access Bank moves to acquire fintech, Woven, to compete with GTCo’s Squad

“In 2024 an extra two million workers are expected to be looking for jobs, raising the global unemployment rate from 5.1% in 2023 to 5.2%.

“Moreover, working poverty is likely to persist and the erosion of real disposable income bodes ill for aggregate demand and a more sustained economic recovery.

“Rates of informal work are expected to remain static, accounting for around 58% of the global workforce in 2024,” the report added.

The ILO raises several key concerns that could further hinder job growth and exacerbate inequalities in the year ahead. Stagnant productivity, particularly in developed economies, is hindering wage growth and impacting disposable income.

Widening inequality, both within and between countries, could further dampen aggregate demand and slow down economic growth. Additionally, the rising cost of living, driven by inflation, is eroding purchasing power and disproportionately impacting low-income households.

In light of these challenges, the ILO calls for a multi-pronged approach to bolster the global job market and address the growing inequalities. The report emphasizes the need for policy interventions aimed at boosting productivity, promoting decent work, and strengthening social protection systems. Additionally, the ILO urges governments to adopt a coordinated approach to tackle inflation and address the root causes of inequality.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now