The International Labour Organization (ILO) published its flagship report on World Employment and Social Outlook: Trends 2025 (January 2025). The report explores trends in the global economy, including its implications for people, especially workers.
Human Level’s Take:
- Global labour markets are grappling with significant challenges, even as the unemployment rate holds steady at 5% in 2024.
- These include slowing economic and job growth, high inflation eroding real wages, widespread informal employment, working poverty, and persistent gender gaps in labour force participation.
- Vulnerable groups, including young people, women, and informal workers, are hit hardest. Youth unemployment remains high at 12.6%, and significant gender gaps persist, driven by structural barriers like gender stereotypes, discrimination, and gender-based violence and harassment. In low-income countries, millions of informal workers face working poverty, with 240 million workers struggling to make ends meet. Over 50% of the global workforce also lacks basic protections like social security, legal safeguards, and workplace safety.
- The green transition and artificial intelligence (AI) are reshaping industries, bringing both challenges and opportunities. Renewable energy jobs have surged to 16.2 million, driven by investments in solar and hydrogen power. AI is transforming sectors, creating new roles and reshaping existing work. However, renewable energy jobs are concentrated, with nearly half in China. Manufacturers face complex tech demands with electric vehicle production, requiring workers to develop advanced skills. Meanwhile, AI’s rise poses challenges like skills gaps, unequal access to technology, and job location disparities, making it harder for workers to shift between sectors.
- So what can companies do? Companies can: 1) invest in skills development and education to equip workers with the expertise needed to adapt to evolving technologies, such as AI and green energy; 2) ensure safe working conditions and fair wages for workers, along with benefits like healthcare and paid leave, to reduce inequality; and 3) work with policymakers to develop inclusive industrial policies that create jobs and address inequality.
Some key takeaways:
- Labour markets face enormous challenges: The ILO reports that the global unemployment rate remained steady at 5% in 2024, with the overall number of jobs missing standing at 402.4 million. However, employment growth remained too weak to close decent work deficits around the world. And young people are disproportionately impacted as they face higher employment rates (around 12.6%). In addition, global economic growth has decreased, down from 3.3 and 3.6% in 2023 and 2022 respectively, to 3.2% in 2024. This is expected to continue over the medium term. While inflation rates have decreased in 2024 due to weaker growth, wage growth has not fully recovered from the losses incurred during the pandemic. This is due in part to slow job growth and employers gaining more power in the job market over the past decade, which has particularly affected vulnerable groups and young people. Furthermore, working poverty persists in low-income countries, with extreme forms affecting 240 million workers (7%) of the global workforce. Moreover, informality remains high across the world and more than 50% of the global workforce are not adequately protected by social security arrangements, legal protection or workplace safety measures.
- Significant gender gaps in labour force participation persists: Gender gaps in labour force participation remains large because significant fewer women than men participate in the workforce. These gaps are also “manifestations of deep structural barriers that women confront when entering the labour market and of the lack of productive opportunities for them.” These barriers stem from pervasive gender stereotypes and social norms that perpetuate “discrimination, fragmented and segregated labour markets, the unequal distribution of unpaid care work and care responsibilities, and gender-based violence and harassment.” In addition, women make up only 32% of the overall renewable energy workforce so there is a large gender bias in employment creation in the green energy sector. Where gender gaps have been falling, this is due to a continuous decline in male participation rates, especially among young men, and not because of improved female participation.
- Major transformations like the green transition and artificial intelligence (AI) present challenges and opportunities for decent jobs: Since 2023, renewable energy jobs have grown to 16.2 million, with over half in the energy and utilities sector. This is due to increased investment in green energy and more focused industrial policies in this sector. For instance, large-scale subsidies and public infrastructure expansion have contributed to a surge in solar and hydrogen power generation that has increased the number of electric vehicles on the road. At the same time, green job opportunities are unevenly distributed, with most renewable energy jobs concentrated in North America, Asia, and particularly China (46%), leaving few decent work benefits available in other developing and emerging countries. Furthermore, many downstream sectors will be impacted by the transition to cleaner energy. For instance, the shift from internal combustion engine to electric vehicles will restructure employment in the automotive industry. Manufacturers will have to address the complex technological demands of electric vehicle production and maintenance, and workers will have to develop advanced skill sets to keep up with evolving technologies. Moreover, battery production and the sourcing of raw materials, including lithium and cobalt, raise issues around labour conditions, accessibility and environmental impact. AI will similarly reshape entire sectors, creating jobs while rendering others obsolete. Factors like skills, access to technology and the geographic locations of new jobs will impede workers from transitioning between sectors and jobs. The report emphasises the need for structural reforms to tackle these challenges, including: 1) boosting productivity by investing in skills training, education and infrastructure to support economic growth and job creation; 2) expanding social protection by providing better access to social security and safe working conditions to reduce inequality; and 3) using private funds effectively, whereby low-income countries can harness remittances and diaspora funds to support local development.
