CEM REPORT, PRODUCTIVITY | The global labour market is bracing for a bumpy ride in 2024, with the International Labour Organisation (ILO) predicting a slight rise in unemployment and a widening gap between the haves and have-nots. While the post-pandemic recovery has shown surprising resilience, new vulnerabilities and mounting crises are casting a shadow over the future of work, raising concerns about social justice and equitable development.
Despite a modest improvement in 2023, the ILO’s World Employment and Social Outlook Trends report paints a worrying picture for 2024. The global unemployment rate is expected to edge up from 5.1% to 5.2%, translating to an additional 2 million people joining the ranks of the jobless. This may seem like a small increase, but it represents a reversal from the 5.3% witnessed in 2022.
Global Unemployment
The report, titled “ILO’s World Employment and Social Outlook Trends: 2024 (WESO Trends),” highlights stark disparities between high-income and low-income countries. In 2023, the jobs gap rate – the number of people who want to work but can’t find a job – stood at a staggering 20.5% in low-income countries, compared to just 8.2% in high-income ones. Similarly, the unemployment rate in low-income countries remained stubbornly high at 5.7%, while high-income countries enjoyed a relatively comfortable 4.5%.
“Despite quickly declining after 2020, the number of workers living in extreme poverty (earning less than $2.15 per person per day in purchasing power parity terms) grew by about 1 million in 2023. The number of workers living in moderate poverty (earning less than $3.65 per day per person in PPP terms) increased by 8.4 million in 2023,” the report said.
Additionally, it warned that income inequality has also widened, stating that the erosion of real disposable income, “bodes ill for aggregate demand and a more sustained economic recovery.”
Impact on Nigeria
The situation closer to home in Nigeria is even bleaker. Nigeria, Africa’s most populous nation, is no stranger to these challenges. The National Bureau of Statistics (NBS) reported a 33.3% unemployment rate in Q3 2023, with youth unemployment even higher at 42.5%.
While the report doesn’t offer specific projections for individual countries, Nigeria already has a high unemployment rate and is likely to exacerbate under the predicted global slowdown. This figure, coupled with an estimated underemployment rate of 22.8%, paints a worrying picture for millions of Nigerians struggling to find secure and adequate employment.
Although these figures are concerning, they are unfortunately not unique to Nigeria. The ILO report warns that working poverty is likely to persist across the globe, with informal work remaining the dominant form of employment, accounting for around 58% of the global workforce.
The report’s Director-General, Gilbert Houngbo, sounded the alarm on the growing inequalities and stagnant productivity. He warned that labour market imbalances are exacerbating existing social fissures, posing a significant threat to the goal of a just and equitable transition to a sustainable future.
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“This should be a cause of concern to nations,” Houngbo emphasized, “not only because it threatens economic well-being, but also because decent work is an essential component of greater social justice.”
Recommendations
The ILO’s findings underscore the urgency of addressing the vulnerabilities and inequalities plaguing the global labour market. This requires a multi-pronged approach, including targeted policies to boost job creation, reduce informality, and promote decent work conditions. Governments, businesses, and civil society must work together to foster inclusive growth and ensure that everyone has the opportunity to participate in and benefit from a sustainable and equitable future of work.
The ILO report serves as a stark reminder of the unfinished business of social justice in the global labour market. It’s a call to action for governments, employers, and international organizations to address the widening inequality, prioritize decent work creation, and invest in initiatives that foster a more inclusive and sustainable future. For Nigeria, tackling the existing high unemployment rate through economic diversification, skills development, and improved access to formal employment opportunities should be a top priority.
