ILO World Employment and Social Outlooks Trends 2023

Our key takeaway: The significant challenges global labour markets face, amidst the backdrop of climate change and biodiversity loss, is made abundantly clear in the new ILO report. A confluence of these challenges will lead to a downward pressure on employment growth, adequate living standards, decent work, and equality - disproportionately impacting the more vulnerable groups in society such as women, young people and those working in low-income countries. The report calls on policymakers to take a more “human-centred” approach to address the myriad challenges facing the global economy, with social and labour protections at the core of this approach. For companies, the report is a reminder that strong labour and social protection rights for workers is critical for people and business. Companies can use their leverage, which includes working with other actors such as civil society organisations, to encourage policy-makers to implement stronger labour rights, and ensure that their own value chain adheres to international labour laws and standards.

The International Labour Organization (ILO) published its World Employment and Social Outlook Trends 2023 Report (2023): 

• Labour markets face enormous challenges: The ILO reports that “[t]he global jobs gap stood at 473 million people in 2022, corresponding to a jobs gap rate of 12.3 per cent.” This is coupled with high informal employment: “Globally, around 2 billion workers were in informal employment in 2022”, and a high percentage of people living in poverty: “In 2022, an estimated 214 million workers were living in extreme poverty.” Within this, gender inequality and regional inequality persist: “Globally, the labour force participation rate of women stood at 47.4 per cent in 2022, compared with 72.3 per cent for men” and “[l]ow-income and lower-middle-income countries present high job gap rates, between 13 and 20 per cent, whereas upper-middle-income countries show a gap of around 11 per cent and high-income countries register a gap of only 8 per cent.” All this is to say that “[p]rogress in poverty reduction achieved over the previous decade has largely faltered and convergence in living standards and work quality is coming to a halt as productivity growth slows worldwide.”

• Climate change causes long-term structural changes in the labour market: Against the backdrop of high unemployment and low-quality jobs, climate change is another factor to consider in its impact on living standards. “Irreversible loss of biodiversity or melting of permafrost could accelerate the rise in temperature, causing large output and employment losses, especially in countries with already fragile ecosystems and high average temperatures. By 2030 an estimated 2.2 per cent of global working hours could be lost to heat stress, mostly in agriculture and construction.” That said, a just transition to net-zero carbon emissions to mitigate the impact of climate change creates opportunities: “Such a transition could create a net 18 million jobs worldwide.” However, this transition must be done in tandem with an increase in “[s]ocial protection measures and targeted income support, alongside skills policies to support transitions from “brown” to green jobs.”
  

• Solutions must take a human-centred approach: The report highlights that taking a people-centred approach is necessary to address the issues. “A more human-centred policy approach is required to strengthen the resilience of economies and societies – to advance social justice amidst the major economic shifts and shocks under way.” More specifically, this includes “strengthening labour and social protection to insure workers and their families against various forms of risks as well as expanding education and vocational training to help workers to transition to alternative sectors or occupations.” For companies, this means understanding the importance of decent work, which includes “respect for fundamental principles and rights at work, productive and freely chosen employment, universal social protection, and social dialogue.”