The International Labour Organization (ILO) published Employment and Social Trends 2026 as part of its World of Work series (January 2026). This report explores the state of global labour markets, and analyses productivity, demographic and economic pressures shaping the world of work over the next year.
Human Level’s Take:
- The global labour market remains fragile. Although unemployment is projected to stay at 4.9% in 2026, the global jobs gap - people who want paid work but cannot access it - is expected to reach 408 million in 2026. Job quality improvements have stalled, with nearly 300 million workers living in extreme poverty and 2.1 billion in informal employment, often without basic rights or social protection. These challenges continue to hinder progress on decent work
- Inequalities persist, particularly for women and young people. Women represent only two-fifths of global employment and are 24.2% less likely than men to participate in the labour force. Global youth unemployment stands at 12.4%, and 20% of young people - around 260 million - are not in employment, education or training
- Rising geopolitical and trade uncertainty, combined with rapid technological change, threatens employment growth and job quality
- AI adoption could affect employment growth prospects, working poverty, real wages and informality, especially for young people entering high-skilled occupations. As a result, many companies are delaying hiring while they assess AI’s impact on operations and skills needed
- So, what can companies do? Businesses have a critical role to play in strengthening worker wellbeing. This includes conducting human rights due diligence to identify and mitigate risks linked to employment practices, setting targets to raise wages and close gender pay gaps, improving working conditions, and working with suppliers to protect vulnerable groups such as informal and migrant workers. Investing in upskilling - especially to help workers adapt to AI and new technologies - can also boost productivity, resilience and earning potential
Some key takeaways:
- The stability of the global labour market is fragile: While global unemployment is projected to remain unchanged at 4.9% in 2026, this should not be mistaken for a return to healthy labour market conditions. The broader global jobs gap - i.e., people who want paid work but cannot access it - is projected to reach 408 million in 2026. At the same time, improvements in job quality has stalled, with nearly 300 million workers living in extreme poverty and 2.1 billion workers in informal employment, often without access to basic rights, social protection or income security. This is coupled with real wage and labour income growth failing to fully recover from recent inflation shocks, limiting gains in living standards. The slowing transition of workers towards sectors with higher formality and employee status is a major driver of the global deceleration in improvements in work quality and productivity growth. This is a major roadblock in ensuring steady progress in narrowing decent work deficits.
- Inequalities persist and labour market outcomes diverge: Persistent inequalities, especially for women and young people, continue to shape access to work and job quality. For instance, women account for only two-fifths of global employment and are 24.2% less likely than men to participate in the labour force. Global youth unemployment stands at 12.4%, and 20% of youth (approximately 260 million people) are not in employment, education or training. These challenges risk leaving lasting scars on the lifetime employment prospects of these groups of workers. In addition, labour market trends increasingly differ across countries. For instance, in high- and upper-middle-income economies, population aging and slower labour force growth mean that job creation is modest but unemployment is stabilising. Contrastingly, low-income countries are facing rapid labour force expansion but weak productivity gains and limited structural transformation mean that many new jobs are of low quality.
- Trade and global risks are reshaping labour market prospects: Trade and global supply chains continue to support employment, with approximately 465 million jobs linked to foreign demand globally. These jobs typically offer better working conditions and higher productivity in low- and middle-income countries. However, slower global trade growth, heightened trade policy uncertainty and rapid technological change are limiting the potential of trade to drive job creation and job quality improvements. High geopolitical uncertainty could drive a significant decline in business and consumer confidence which, along with a reduction in vacancies, could depress employment growth, raise unemployment rates, and constrain wage growth and domestic consumption. In addition, AI adoption could compound challenging labour market conditions for young workers, especially those seeking jobs in high-skilled occupations. It could have non-negligible impacts on employment growth prospects and key dimension of work quality, such as informality, working poverty and real wages. Uncertainty around AI adoption is already influencing company behaviour. Companies are hesitant to hire or expand their workforce until they understand better how AI will impact internal operations, skills requirements and their competitive environment.
