ILO’s World Employment and Social Outlook Report

The International Labour Organisation (ILO) released its World Employment and Social Outlook Report, denoting pressing issues in global labour markets. The report indicates jobs gap, rising from 402 million in 2024. This gap includes various categories of workers, such as the unemployed and those discouraged from seeking work. Current economic conditions, including geopolitical tensions and climate change costs, exacerbate these challenges.

Current Labour Market Situation

In 2024, the global jobs gap reached 402 million. This figure represents individuals seeking employment but unable to find it. Among these, 186 million are unemployed, while 137 million are temporarily unavailable for work. Additionally, 79 million have stopped looking for jobs altogether. The report suggests a gradual narrowing of this gap since the pandemic, though it is expected to stabilise in the coming years.

Inflation and Real Wages

While inflation rates have decreased, they remain high, impacting wage values. Real wages have only seen increases in some advanced economies. Most countries are still grappling with the pandemic’s aftermath and persistent inflation. This situation limits economic recovery and affects workers’ purchasing power.

Labour Force Participation Trends

Labour force participation rates show a declining trend in low-income countries. Conversely, high-income nations have witnessed increased participation, particularly among older workers and women. Despite these gains, gender disparities persist, with fewer women in the workforce. This imbalance hampers overall progress in living standards.

NEET Rates Among Young Men

The report marks a concerning rise in NEET (Not in Education, Employment, or Training) rates among young men, particularly in low-income countries. These rates have increased by nearly 4 percentage points above pre-pandemic averages. Young men in these regions face heightened vulnerability to economic challenges due to this trend.

Recommended Strategies for Improvement

The ILO urges countries to enhance productivity and expand social protection. It recommends effective use of private funds to tackle current challenges. Investments in skills training, education, and infrastructure are vital for economic growth and job creation. Improved access to social security and safe working conditions can help reduce inequality. Low-income countries are encouraged to leverage remittances and diaspora funds for local development.

Future Outlook

The global labour market faces hurdles. However, with targeted strategies and investments, there is potential for recovery and growth. The focus should remain on inclusivity and equitable opportunities for all workers, particularly vulnerable groups.

Questions for UPSC:

1. Critically discuss the impact of geopolitical tensions on global labour markets.
2. Examine the relationship between inflation rates and real wages in different economies.
3. Analyse the factors contributing to rising NEET rates among young men in low-income countries.
4. Estimate the role of skills training and education in enhancing productivity in developing nations.

Answer Hints:

1. Critically discuss the impact of geopolitical tensions on global labour markets.

1. Geopolitical tensions disrupt trade and investment flows, leading to job losses in affected sectors.
2. Increased uncertainty can deter businesses from hiring, exacerbating unemployment rates.
3. Conflicts can lead to displacement, creating a population of refugees and internally displaced persons who are jobless.
4. Countries may prioritize military spending over social programs, negatively affecting labor market support.
5. Global supply chain disruptions can result from geopolitical conflicts, impacting production and employment in multiple industries.

2. Examine the relationship between inflation rates and real wages in different economies.

1. High inflation erodes purchasing power, leading to stagnant or declining real wages for workers.
2. In advanced economies, some sectors may see wage growth, but overall trends remain negative in many regions.
3. Low-income countries often experience higher inflation rates, further diminishing wage value for workers.
4. Inflation impacts different sectors unevenly, affecting wage negotiations and labor market dynamics.
5. Real wages can improve in a stable economy but are hindered by persistent inflation and economic instability.

3. Analyse the factors contributing to rising NEET rates among young men in low-income countries.

1. Economic instability and lack of job opportunities lead to increased NEET rates among young men.
2. Limited access to education and vocational training restricts employment prospects for youth.
3. Social and cultural factors may discourage young men from pursuing education or training.
4. High levels of poverty and inadequate social protection systems contribute to disillusionment and disengagement.
5. The pandemic has exacerbated existing vulnerabilities, pushing more young men into NEET status.

4. Estimate the role of skills training and education in enhancing productivity in developing nations.

1. Skills training equips workers with relevant competencies, increasing their employability and productivity.
2. Education encourages innovation and adaptability, essential for economic growth in developing nations.
3. Investment in skills development can lead to higher wages and improved living standards for workers.
4. Collaboration between governments, businesses, and educational institutions is vital for effective skill training programs.
5. Access to education and training can help bridge gender gaps and enhance workforce participation overall.