On January 10 (New York time), the International Labor Organization (ILO) of the United Nations released a report stating that the world unemployment rate is expected to increase in 2024.
In its “World Employment and Social Outlook 2024 Trends” report, the ILO predicts that global unemployment will rise to more than 5% this year, inequality will also increase and labor productivity may decline.
The ILO said the current situation is better than before the Covid-19 pandemic, but will not last and an additional 2 million workers are expected to be looking for work in the next 12 months.
“We expect a modest deterioration in the performance of labour markets, partly because of slowing growth around the world,” said Richard Samans, ILO director of research.
The ILO said that after a brief period of growth as countries recovered from the Covid-19 pandemic, labor productivity quickly returned to the low growth rates witnessed in the previous decade.
The ILO also highlighted the impact of ongoing geopolitical tensions and persistent inflation. In particular, the ILO noted that most of the world’s richest countries are seeing their living standards fall due to inflation, which is unlikely to be reversed in the short term. Real wages have fallen in most G20 countries, as wage growth has failed to keep pace with inflation.
The ILO report highlights the significant disparities between high-income and low-income countries. While the employment gap (the number of unemployed people looking for work) in 2023 was 8.2% in rich countries, it was 20.5% in poorer countries. Similarly, while the unemployment rate in 2023 in rich countries was just 4.5%, it was 5.7% in low-income countries.
“Falling living standards, stagnant productivity and high inflation are fuelling inequality and hampering efforts to achieve social justice,” warned ILO Director-General Gilbert Houngbo.
"Without improving social equity, the world will never achieve a sustainable recovery," said Mr. Houngbo, calling for a quick and effective resolution of workforce challenges.
Although it is only 2024, many international financial agencies and organizations have made quite detailed forecasts about economic growth, labor, and employment this year. The forecasts given by the ILO are similar to the latest report released on January 9 by the World Bank (WB), in which the global economy is forecast to head towards the slowest growth in the past 30 years. According to the WB's latest Global Economic Prospects Report, the global economy is forecast to grow by 2.4% in 2024 - continuing the decline for the third consecutive year, and marking a series of 5 years with the lowest growth rate in 3 decades.
The report released by the World Bank shows that the economic situation in the period of 2020-2024 is even worse than the years of the global financial crisis of 2008-2009 or the period of the Asian financial crisis in the late 1990s and the economic recession in the early 2000s. According to the World Bank, although the global economy proved resilient in the face of recession risks in 2023, rising geopolitical tensions will pose new challenges in the short term, causing most economies to grow more slowly in 2024 and 2025 compared to the previous decade. "The escalation of conflicts in the Middle East and Europe could have a significant impact on energy prices, inflation and economic growth," said Mr. Ayhan Kose, Deputy Chief Economist at the World Bank.
Minh Hoa (t/h according to Vietnam+, People's Army)
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