Economic collapse, world economy, World Bank, coronavirus world economy

Economic slowdown will force workers into worse jobs: UN

A global economic slowdown will force more workers into accepting lower quality, poorly paid jobs in 2023, while inflation gobbles up real term wages, the United Nations warned on Jan 16.

As prices rise faster than incomes, the cost-of-living crisis risks pushing more people into poverty, the UN’s International Labour Organization said, whileunemployment around the world is set to rise.

The ILO said deficits in decent work had been worsened by multiple, overlapping crises, including Russia’s war in Ukraine, emerging geopolitical tensions, an uneven recovery from the Covid-19 pandemic and continuing supply chain bottlenecks.

“Together, these have created the conditions for stagflation — simultaneously high inflation and low growth — for the first time since the 1970s,” the agency said in its annual World Employment and Social Outlook report.

ILO director general Gilbert Houngbo said the recovery from the Covid-19 pandemic was particularly patchy in low- and middle-income countries, and was further hampered by climate change and humanitarian challenges.

“Projections of a slowdown in economic and employment growth in 2023 imply that most countries will fall short of a full recovery to pre-pandemic levels in the foreseeable future,” the former prime minister of Togo said in the report.

“Worse still, progress in labour markets is likely to be far too slow to reduce the enormous decent work deficits that existed prior to, and were exacerbated by, the pandemic.”

– No Covid recovery before 2025 –

Global employment grew by 2.3 percent last year, but is expected to expand by just one percent this year, to nearly 3.4 billion people with work.
The projected rise is down on the 1.5 percent the ILO had previously predicted, adding to the gloomy outlook.

“The slowdown in global employment growth means that we don’t expect the losses incurred during the Covid-19 crisis to be recovered before 2025,” the ILO’s research chief Richard Samans said in a statement.

Global unemployment is projected to reach 208 million people this year, an unemployment rate of 5.8 percent.

The projection is up from 205 million in 2022, with the ILO saying most of the shock of the economic slowdown has been absorbed by “rapidly falling real wages” due to accelerating inflation, rather than job losses.

Global unemployment was at 192 million in 2019 before surging to 235 million in 2020 as the Covid pandemic kicked in.

Meanwhile the global jobs gap stood at 473 million in 2022.

This number comprises unemployment plus those who want work but are not seeking a job, either due to being discouraged by previous failed attempts or having other obligations such as care responsibilities.

The 2022 global jobs gap was around 33 million above the 2019 level, with a rate of 15 percent for women and 10.5 percent for men.

– Informal economies –

“The current slowdown means that many workers will have to accept lower quality jobs, often at very low pay, sometimes with insufficient hours,” the ILO said.

The report said people aged 15 to 24 were facing “severe difficulties” in finding and keeping decent employment.

The ILO called for an investment surge in education and training, saying two-thirds of the global youth labour force was “without a basic set of skills”, which limited their job prospects and pushed them into lower-quality work.

Around two billion workers worldwide were in informal employment last year.
“Given the substantial rise in uncertainty regarding the future course of the global economy, employment expansion is fastest among informal workers,” the ILO said, with the informal sector driving most of the Covid-19 employment recovery.

In 2022, an estimated 214 million workers, or 6.4 percent of all those employed, were in extreme poverty, earning less than the equivalent of $1.90 a day.

The report said the long-term slowdown in productivity growth in advanced countries had spread to major emerging economies — “a matter of much concern” since growth in productivity could combat the concurrent crises in purchasing power, well-being and ecological sustainability.




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