Geneva, 16 January 2025
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 2025 update.
In 2024 global employment was flat, growing only because of an increase in the labour force, so keeping the unemployment rate steady at 5 per cent, the report says. However, youth unemployment showed little improvement, remaining high at 12.6 per cent. Informal work and working poverty returned to pre-pandemic levels, with low-income countries facing 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.
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 shortages persist throughout much of Europe, preventing a faster return to pre-pandemic trends, the report has found. There are shortages in the areas of science, technology, engineering and mathematics, ICT and healthcare. Evidence for 2023 shows elevated labour shortages in several countries, including Denmark, Germany, France, the Netherlands and Belgium.
The shortages are also evident in several Eastern European countries, including Romania and Croatia, where they are exacerbated by emigration of young and skilled workers.
Labour force participation is declining, especially among young people
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).
NEET rates in low-income countries rose in 2024, whereas they are substantially declining in Europe. 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 reaches 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, another 137 million who have stopped searching for work, and 79 million who would like to work but who have obligations, such as care, that hinder them from taking up employment. 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 increased 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. The EU-27 has about 1.81 million renewable energy jobs.
Digital technologies also offer opportunities, but many countries lack the infrastructure and skills to fully benefit from these advances, 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. Every delay risks deepening the crisis and leaving millions further behind,” 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; and
- Expand social protection: provide better access to social security and safe working conditions to reduce inequality.
The link below will give access to the report.