The International Labour Organization (ILO) has predicted a slight increase in unemployment in the global job market, despite stronger-than-expected growth in 2023.
This was contained in its latest World Employment and Social Outlook Trends report released on Wednesday.
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.
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 predicted a global unemployment rate of 5.2% in 2024, and a minor increase from the 5.1% estimated for 2023.
The agency emphasized that the seemingly minimal rise masks worrying regional disparities, with developing economies expected to experience a more pronounced job market slowdown.
“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 raised several key concerns that could further hinder job growth and exacerbate inequalities in the year ahead to include, stagnant productivity, particularly in developed economies, which is hindering wage growth and impacting disposable income.
Other concerns are widening inequality, both within and between countries, which could further dampen aggregate demand and slow down economic growth, and the rising cost of living, driven by inflation, which is eroding purchasing power and disproportionately impacting low-income households.
In light of these challenges, the ILO called for a multi-pronged approach to bolster the global job market and address the growing inequalities.
The report emphasized the need for policy interventions aimed at boosting productivity, promoting decent work, and strengthening social protection systems.
The ILO urged governments to adopt a coordinated approach to tackle inflation and address the root causes of inequality.