Economic Slowdown: Decent Work Deficits Persist, Undermining Social Justice

It is the beginning of 2023, a time for reflection and estimates. On January 16th, the ILO published a new edition of the World Employment and Social Outlook: Trends 2023 (WESO 2023), which covers the extent and consequences of overlapping economic and geopolitical crises on the global labour market.

UN bodies (such as the ILO) publish flagship reports to share information about the work of the organisation with the public. These reports usually come out annually to report global or regional statistics on a certain topic and often have a theme for the year. The WESO is a flagship report of the ILO, published annually to report global statistics on employment and social outlook. The report is produced by the Data Production and Analysis Unit in the ILO Department of Statistics together with the Macro-economic Policies and Jobs Unit of the ILO Research Department, and coordinated by the Director of the ILO’s Research Department.

Obviously, the world has had a few rough years with challenges like the COVID-19 crisis, the cost-of-living crisis and the economic fallout due to the Ukraine conflict. The WESO 2023 focuses on the impact of these crises on productivity, job quality and job opportunities and how these trends risk undermining social justice around the world. The ILO uses 2019 numbers as a pre-crisis benchmark. The key concerns the ILO pointed out consist of the following aspects.

First of all, the global employment growth will decline. Simultaneously, global unemployment will rise and therefore remain 16 million above the pre-crisis benchmark (set in 2019). The global jobs gap – a new measure of unmet need for employment – stood at 473 million in 2022, around 33 million above the level of 2019. In addition to unemployment, job quality remains a key concern. Because of the economic slowdown, many workers are forced into accepting low quality jobs, with very low pay and insufficient hours. On top of that the number of workers in the informal economy keeps growing, currently standing at 2 billion, which means these workers have little to no social protection. Furthermore, 214 million workers live in extreme poverty despite having a job.

The cost-of-living crisis is expected to push even more people into extreme poverty. Lastly, women and young workers are faring worse in labour markets. Globally, according to the labour force participation rate, for every economically inactive man there are two such women. For young people it is very difficult to find and keep a decent job, resulting in the fact that their unemployment rate is three times higher than that of adults.

It becomes clear that the concerns reported in the WESO 2022 are not yet taken away but even amplified due to emerging geopolitical tensions and the Ukraine conflict, uneven pandemic recovery, and continuing bottlenecks in global supply chains. Together, these have created the conditions for stagflation – simultaneously high inflation and low growth – for the first time since the 1970s. In other words, the crisis lingers on.

This is all very concerning, since decent work is fundamental to social justice. ILO Director-General, Gilbert F. Houngbo emphasises that we must work together to create a new global social contract. The ILO calls for a Global Coalition for Social Justice aimed at strengthening global solidarity and improving policy coherence, in order to bring about action and investment for decent work and social justice. The ITUC’s reaction to the WESO 2023 can be found here.