The global economy is slowing down, making it harder for labour markets to recover fully since the outbreak of the COVID 19 pandemic, according to the International Labour Organization’s (ILO) report, World Employment and Social Outlook: Trends 2025, released in Geneva on Thursday.
Pointing to the relatively high growth rates in Southern Asia, the ILO report said they are driven by India’s growth performance. “India’s growth underpins GDP growth performance in Southern Asia, a sub-region whose GDP is expected to have grown by 6.2% in 2024 and to grow by 5.8% in 2025. India has one of the fastest growth rates in the world, 6.9% in 2024 and forecast to be 6.4% in 2025. India’s growth is driven by monetary policy easing, strong domestic demand, and public investment,” the report said citing studies of global agencies such as the International Monitory Fund.
In 2024, the report said, global employment grew in line with the labour force, keeping the unemployment rate steady at 5%. “However, youth unemployment showed little improvement, remaining high at 12.6%. Informal work and working poverty returned to pre-pandemic levels, and low-income countries faced the most difficulties in creating decent jobs,” it said.
Geopolitical tensions, the rising costs of climate change and unresolved debt issues are the challenges before the recovery and the reasons for putting labour markets under pressure. “Economic growth stood at 3.2% in 2024, down from 3.3 and 3.6% in 2023 and 2022, respectively. A similar level of growth is expected in 2025, although a gradual deceleration is expected to set in over the medium term,” the report said. The inflation, the report said, has decreased, but it remains high, reducing the value of wages.
“Real wages have only increased in some advanced economies, and most countries are still recovering from the effects of the pandemic and inflation,” the report said.
The labour force participation rates have dropped in low-income countries while increasing in high-income nations, mainly among older workers and women, the report pointed out. “However, gender gaps remain wide, with fewer women in the workforce, limiting progress in living standards,” it said. “There have been significant increases in the labour force participation rate in Southern Asia, driven by increases in female participation, particularly in India,” it said.
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, 137 million who are temporarily unavailable to work, and 79 million discouraged workers who have stopped looking for jobs,” the report said.
The ILO Director-General, Gilbert F. Houngbo said 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,” he said.
The report urged member countries to boost productivity, invest in skills training, education and infrastructure to support economic growth and job creation. “Expand social protection: provide better access to social security and safe working conditions to reduce inequality. Use private funds effectively: low-income countries can harness remittances and diaspora funds to support local development,” it said.
Published – January 16, 2025 11:56 pm IST
