Geneva: The outlook for global labour markets has worsened in recent months and on current trends job vacancies will decline and global employment growth will deteriorate significantly in the final quarter of 2022, according to a new ILO report.
Rising inflation is causing real wages to fall in many countries. This comes on top of significant declines in income during the COVID-19 crisis, which in many countries affected low-income groups most.
The ILO Monitor on the World of Work. 10th edition , finds that worsening labour market conditions are affecting both employment creation and the quality of jobs, pointing out that there are already data suggesting a sharp labour market slowdown. Labour market inequalities are likely to increase, contributing to a continued divergence between developed and developing economies.
According to the Monitor, a set of multiple and overlapping crises, compounded by the Ukraine war and subsequent negative spill over effects, have materialized over 2022 which are deeply impacting the world of work. The effects are being felt through food and energy inflation, declining real wages, growing inequality, shrinking policy options and higher debt in developing countries. A slowdown in economic growth and aggregate demand will also reduce demand for workers as uncertainty and worsening expectations affect hiring.
"Tackling this deeply worrying global employment situation, and preventing a significant global labour market downturn, will require comprehensive, integrated and balanced policies both nationally and globally. We need the implementation of a broad set of policy tools, including interventions in the prices of public goods; the rechannelling of windfall profits; strengthening income security through social protection; increasing income support; and targeted measures to assist the most vulnerable people and enterprises," said ILO Director-General, Gilbert F. Houngbo, in a media release on Monday.
"We need a strong commitment to initiatives such as the UN Global Accelerator on Jobs and Social Protection , which would help countries create 400 million jobs and extend social protection to the four billion people who are currently unprotected. And a rapid end to the conflict in Ukraine, as demanded in the resolutions of the ILO Governing Body, would further contribute to improving the global employment situation," Houngbo added.
At the beginning of 2022 the number of global hours worked was recovering strongly, notably in higher-skilled occupations and among women. However, this was driven by an increase in informal jobs, jeopardizing the 15-year trend towards formalization. The situation worsened over the course of the year and in the third quarter of 2022 ILO estimates are that the level of hours worked was 1.5 per cent below pre-pandemic levels, amounting to a deficit of 40 million full-time jobs.
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