World Employment and Social Outlook: Trends 2023

The ‘jobs gap,’ an indicator developed by the ILO, measures all people who are unemployed but wish to find a job. In 2022, the jobs gap was recorded to be around 473 million. This brings the job gap rate to 12.3 per cent.

As per the report, the jobs gap for women is higher than that for men – 15 per cent compared to 10.5 per cent. Low-income and lower-middle-income countries record a higher job gap rate (13 to 20 per cent) compared to upper-middle-income countries (around 11 per cent). High-income countries have the lowest job gap of only eight per cent.

Around 6.4 per cent of individuals who were employed in 2022 (roughly 214 million) were living in extreme poverty. That is, they earned less than 1.90 US dollars a day per person measured in purchasing power parity.

Workforce experiences show significant inequalities across countries, as women and young people (aged 15-24 years) face more challenges in labour markets. In 2022, women's labour force participation rate was 47.4 per cent, considerably lower than the men's rate of 72.3 per cent.

The rate of unemployment among those aged 15-24 years is three times than that among those aged 25 years or older. Additionally, 23.5 per cent of 15 to 24-year-olds are not engaged in education, employment or training, the report notes.

The report marks an expected increase in global employment at one per cent in 2023. This is a substantial slowdown from the growth rate of 2.3 per cent noted in 2022. Projections for 2024 also remain underwhelming showing a 1.1 per cent increase in employment.

Overall, a robust growth in employment in 2022 caused the global employment-to-population ratio to rise to 56.4 per cent, a noticeable increase from the 54.5 per cent recorded in 2020. However, it is still lower than 2019 levels, with a difference of nearly half a percentage point.

According to the report, global unemployment will increase by approximately three million in 2023, resulting in a total of 208 million people unemployed (or an unemployment rate of 5.8 per cent). This is more than 15 million over 2019 figures.

In 2021, 60.8 per cent of the employed population in sub-Saharan Africa and 34.7 per cent in South Asia were classified as ‘working poor’ at the 3.10 US dollars per day threshold.

From a sample of 24 middle-income countries, excluding agriculture and non-market services, it was estimated that 11.3 per cent of jobs rely on GSC (global supply chain) connections with high-income countries. The demand slowdown in high-income countries is thus being passed through GSCs and is affecting employment in low- and middle-income countries.

The current ‘polycrisis’ has the potential to result in global economic growth falling below two per cent in 2023, which would have significant consequences on job creation. Even if the growth rate does not slow down further, the outlook for the labour market could worsen if businesses face limitations in funding and were unable to retain employees, or if governments faced a debt crisis that limited their ability to support labour markets, the report states.

At present, around two-thirds of the worldwide youth labour force lacks fundamental skills, the report notes. This hinders their prospects in the job market and makes them more susceptible to taking up lower-quality jobs. The report outlines a need for investment in educating and training the youth for better participation in the labour force.

Focus and Factoids by Daanish Narayan.