ILO: labor market recovery reversed
Multiple and interlinked global crises and rising inequalities threaten recovery in the global labor market, according to the new ILO Working Life Report. The ILO report is an important contribution at a time of rising global stagflation expectations. A decline in labor demand also contributes negatively to global economic growth by slowing wage increases and households’ total disposable income.
According to the new International Labor Organization (ILO) report, multiple global crises together with rising inequalities within and between countries are significantly reversing the recovery in the global labor market.
ILO Working Life Monitor, 9th Edition, After significant gains in Q4 2021, global hours worked fell 3.8% in Q1 2022 below pre-crisis levels (Q4 2019) to 112 million, which a full-time job corresponds to a gap. This figure represents a significant decrease from figures published by the ILO in January 2022.
Several new and interconnected global crises exacerbated by the Ukraine crisis, including inflation (particularly in energy and food prices ), financial turmoil, potential debt shutdown and disruptions in the global supply chain, hours worked in 2022 The heightened risk of further deterioration means the impact on global labor markets will intensify in the coming months. As noted in the recent ILO briefing, Russia’s attack on Ukraine is affecting labor markets in Ukraine and elsewhere.
The wide and growing divergence between rich and poor economies remains a key feature of the recovery, according to the report. High-income countries saw a rebound in working hours compared to pre-crisis levels, with low-income countries hitting 3.6% and lower-middle-income countries hitting 5.7% in the first quarter of 2022. This divergence trend is likely to intensify in the second quarter of 2022.
In some developing countries, governments are bound by a lack of fiscal space and debt sustainability challenges; On the other hand, companies face economic and financial insecurity and workers do not have adequate access to social protection.
More than two years after the global pandemic broke out, many people in the workforce are still overwhelmed with the impact on labor markets.
- Labor income has not yet recovered for the majority of workers. In 2021, three out of five workers lived in countries where labor income did not recover by the fourth quarter of 2019.
- During the global epidemic, the gender gap in working hours also increased. In Q1 2022, the global gender gap in hours worked increased by 0.7 percentage points from pre-crisis levels (Q4 2019), when there was already a large gap. Women working informally were the most affected. In terms of income groups, the countries with the highest gender gap were low- and middle-income countries.
- The sharp rise in job vacancies in advanced economies in late 2021 and early 2022 has resulted in a tight labor market, with vacancies increasing according to job seekers. Overall, however, given the size of the unemployed and underemployed in many countries, there is no clear evidence that overall labor markets are overheating.
- Due to disruptions in production and trade, exacerbated by the Ukraine crisis, food and commodity prices are hitting poor households and small businesses, particularly those operating in the informal economy.
“The global labor market recovery has reversed. The unstable and fragile recovery was made even more uncertain by a combination of crises that aggravated each other. The impact on workers and their families, particularly in developing countries, will be devastating, leading to social and political earthquakes,” said ILO Director-General Guy Ryder.
In line with the ILO’s Global Call to Action on Human-Centered Recovery and the ILO-led UN initiative, the Global Accelerator for Employment and Social Protection, the report proposes a number of actions for the coming Time before:
- Timely and effective support to maintain the purchasing power of labor income and the general standard of living of workers and their families;
- Immediate tripartite dialogue in support of reasonable and equitable wage adjustments, including minimum wages; strengthening social protection systems and income support; implementation of food safety measures, if necessary;
- Alleviating pressures on inflation and debt sustainability through careful regulation of macroeconomic policies while supporting a job-rich and inclusive recovery;
- Support for hard-hit groups and sectors, particularly vulnerable workers and those transitioning from the informal to the formal economy;
- Long-term, well-designed sectoral policies that support decent and green jobs, sustainability and inclusion, and help businesses, particularly micro, small and medium-sized enterprises (MSMEs).
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