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Economic recovery is losing steam, new ILO report says

Jan 17, 2025 News

…geopolitical tensions, unresolved debt issues cited

Kaieteur News- The global economy is slowing down, making it harder for labour markets to recover fully, according to the newly-released, World Employment and Social Outlook: Trends 2025.

In 2024 global employment grew in line with the labour force, keeping the unemployment rate steady at 5 per cent, the report done by the International Labour Organisation (ILO) says. However, youth unemployment showed little improvement, remaining high at 12.6 per cent. Informal work and working poverty returned to pre-pandemic levels, and low-income countries faced the most difficulties in creating decent jobs.

Challenges to recovery

The report points to challenges such as geopolitical tensions, the rising costs of climate change and unresolved debt issues, which are putting labour markets under pressure. Economic growth stood at 3.2 per cent in 2024, down from 3.3 and 3.6 per cent in 2023 and 2022, respectively. A similar level of growth is expected in 2025, although a gradual deceleration is expected to set in over the medium term. Although inflation has decreased, it remains high, reducing the value of wages, the report finds. Real wages have only increased in some advanced economies, and most countries are still recovering from the effects of the pandemic and inflation.

Labour force participation rates have dropped in low-income countries while increasing in high-income nations, mainly among older workers and women, the report finds. However, gender gaps remain wide, with fewer women in the workforce, limiting progress in living standards. Among young men participation has fallen sharply, with many not in education, employment or training (NEET). This trend is especially pronounced in low-income countries, where NEET rates for young men have risen by nearly 4 percentage points above the pre-pandemic historical average, leaving them vulnerable to economic challenges.

NEET rates in low-income countries rose in 2024, with young men reaching 15.8 million (20.4 per cent) and young women 28.2 million (37.0 per cent), marking increases of 500,000 and 700,000 respectively from 2023. Globally, 85.8 million young men (13.1 per cent) and 173.3 million young women (28.2 per cent) were NEET in 2024, up by 1 million and 1.8 million respectively from the previous year.

The global jobs gap amounts to 402 million

The global jobs gap – the estimated number of people who want to work but do not have a job – reached 402 million in 2024. This includes 186 million unemployed people, 137 million who are temporarily unavailable to work, and 79 million discouraged workers who have stopped looking for jobs. While the gap has been gradually narrowing since the pandemic it is expected to stabilize over the next two years.

New opportunities in green and digital sectors

The study identifies potential for job growth in green energy and digital technologies. Renewable energy jobs have grown to 16.2 million worldwide, driven by investment in solar and hydrogen power. However, these jobs are unevenly distributed, with nearly half based in East Asia.  Digital technologies also offer opportunities, but many countries lack the infrastructure and skills to fully benefit from these advancements, the report notes.

Innovative solutions

The ILO Director-General, Gilbert F. Houngbo, stressed the urgent need for action. “Decent work and productive employment are essential for achieving social justice and the Sustainable Development Goals. To avoid exacerbating already strained social cohesion, escalating climate impacts, and surging debt, we must act now to tackle labour market challenges and create a fairer, more sustainable future,” he said. The report makes some recommendations to address current challenges:

Boost productivity: invest in skills training, education, and infrastructure to support economic growth and job creation; expand social protection: provide better access to social security and safe working conditions to reduce inequality and use private funds effectively: low-income countries can harness remittances and diaspora funds to support local development.

(Economic recovery is losing steam, new ILO report says)

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