Frightening scenario from the United Nations

The United Nations International Labour Organization (ILO) has published a report titled "World Employment and Social Outlook: Trends 2024."

The report states that while labor markets have shown surprising resilience despite worsening economic conditions, there is concern over the weakening of hopes for social justice due to new vulnerabilities and successive crises.

It was noted that the global unemployment rate, which was 5.3 percent in 2022, fell to 5.1 percent last year, and that there were improvements in the global jobs gap and labor force participation rates in 2023.

Pointing out that vulnerabilities have emerged due to minor changes in these data, the report estimates that the number of job seekers will increase by 2 million this year, causing the global unemployment rate to rise from 5.1 percent in 2023 to 5.2 percent.

"IT IS NOT POSSIBLE TO COMPENSATE QUICKLY"

It was stated that net incomes have decreased in most G20 countries and that the decline in living standards caused by inflation does not appear to be "possible to compensate for quickly."

Emphasizing that significant differences are observed between high- and low-income countries, the report noted that the jobs gap, which was 8.2 percent in high-income countries last year, was calculated at 20.5 percent in low-income countries.

Predicting that working poverty will persist, the report stated that despite a rapid decline after 2020, the number of workers living in extreme poverty increased by approximately 1 million in 2023.

The report, which also mentions that income inequality is rising, provided information that the decline in real disposable income is a bad sign for aggregate demand and a more sustainable economic recovery.

IMBALANCES IN THE LABOR MARKET

The report stated that labor force participation rates have returned to pre-Covid-19 pandemic levels, but that the gender gap remains significant, especially in emerging and developing countries.

Pointing out that youth unemployment rates are also at problematic levels, the report stated that people who re-entered the labor market after the Covid-19 pandemic tend not to work as many hours as before, and that the number of days taken off has increased significantly.

Stating that productivity growth continues to slow despite technological advances and increased investments, the report assessed: "One reason for this is that significant amounts of investment have been directed toward less productive sectors such as services and construction. Other obstacles include skill shortages and the dominance of large digital monopolies that prevent the faster adoption of new technologies, especially in developing countries and in sectors dominated by firms with low productivity."

ILO Director-General Gilbert Houngbo, whose views were included in the report, stated: "It seems that these imbalances are no longer just part of the post-Covid-19 recovery, but are also structural imbalances."

Emphasizing that the challenges identified in the report regarding the labor force pose a threat to both individual livelihoods and businesses, Houngbo noted the following:

"Therefore, it is very important that we combat these effectively and quickly. When the decline in living standards and low productivity are combined with persistent inflation, conditions that pave the way for rising inequality emerge, and this situation hinders efforts to achieve social justice, and if more social justice cannot be achieved, a sustainable recovery will never be possible."

News Source: AA