The International Labour Organisation(ILO), in its World Employment and Social Outlook released this week projects that unemployment will rise by 3.4 million between now and 2018.
The report indicates that deteriorating labour market conditions in emerging countries will drive unemployment levels and rates this year.
The International Labour Organization predicts unemployment will rise by about 2.3 million this year to 199.4 million, and that 1.1 million will be added to the global count in 2017, taking joblessness to more than 200 million for the first time.
The ILO, a UN agency focused on labour standards and social protection, said the effects of last year’s economic slowdown would play out in higher unemployment in 2016, particularly in Asia, Africa, Latin America and the Middle East.
The ILO report comes at a time when the International Monetary Fund (IMF) updated its World Economic Outlook in which it forecasts overall global growth at 3.4 percent for 2017 and 3.6 percent for 2018, unchanged from October. That compared to 3.1 percent in 2016, the weakest year since the 2007-2009 financial crisis.
In fact, the number of unemployed people in emerging countries is expected to increase by approximately 3.6 million between 2016 and 2017 (during which time the unemployment rate in emerging countries is expected to climb to 5.7 per cent, compared with 5.6 per cent in 2016). Of notable concern are developments in Latin America and the Caribbean, where the unemployment rate is expected to rise by 0.3 percentage points in 2017, to reach 8.4 per cent – largely driven by rising unemployment in Brazil.
In contrast, forecasted ILO, unemployment is expected to fall in 2017 in developed countries (by 670,000), bringing the rate down to 6.2 per cent (from 6.3 per cent in 2016). In Europe, unemployment levels and rates are both expected to continue to fall, but the pace of improvement will slow, and there are signs that structural unemployment is worsening.
ILO also expects vulnerable forms of employment to remain above 42 per cent of total employment in 2017, accounting for 1.4 billion people worldwide.
“In fact, almost one in two workers in emerging countries are in vulnerable forms of employment, rising to almost four in five workers in developing countries. As a result, the number of workers in vulnerable forms of employment is projected to grow globally by 11 million per year. The two regions most affected by vulnerable employment are Southern Asia and sub-Saharan Africa,” states the report.
Vulnerable employment is defined as the sum of the employment status groups of own account workers and contributing family workers. They are less likely to have formal work arrangements, and are therefore more likely to lack decent working conditions, adequate social security and ‘voice’ through effective representation by trade unions and similar organizations. Vulnerable employment is often characterized by inadequate earnings, low productivity and difficult conditions of work that undermine workers’ fundamental rights.
Worryingly, the report highlighted the fact that reductions in working poverty are slowing, endangering the prospects for eradicating poverty as set out in the Sustainable Development Goals.
“Working poverty remained a problem in 2016, with nearly half of workers in Southern Asia and nearly two-thirds of workers in sub-Saharan Africa living in extreme or moderate working poverty. Working poverty rates have been declining over the long term and this trend is expected to continue in 2017. In emerging and developing countries, the share of workers living in moderate or extreme poverty is expected to fall from 29.4 per cent in 2016 to 28.7 per cent in 2017. However, progress in reducing working poverty rates is slowing,” noted the report.
The gender gaps in the labour market also extend to differences in remuneration. As the recent ILO Global Wage Report 2016/17 highlighted, the gap in hourly wages, which reaches as high as 40 per cent continues to persist despite improvements in equal pay legislation in a number of countries.
“Diverging economic paths are seen across sub-Saharan Africa At 1.6 per cent in 2016, economic growth in sub-Saharan Africa is at its lowest level in over two decades – a sharp contrast to the annual average of nearly 5 per cent over the past ten years,” reported ILO.
“This downturn has largely been due to the effects of low commodity prices on resource-intensive countries, such as Angola, Nigeria and South Africa (with oil-exporting countries faring particularly poorly). The reductions in commodity revenues have typically led to fiscal tightening, amidst inflationary pressures and weaker terms of trade. For countries with high export dependence and resource intensity, the impact has been exacerbated by declining demand from China and Europe.”
For sub-Saharan Africa as a whole, ILO projects a slight recovery to 2.9 per cent is anticipated for 2017, the achievement of which will rely on recoveries among commodity exporters, alongside elevated growth rates in a number of non-resource-intensive economies.
“Poor-quality employment prevails for the rapidly growing working-age population Sub-Saharan Africa’s unemployment rate is forecast to be 7.2 per cent in 2017, unchanged from 2016. While the unemployment rate remains stable, the number of unemployed is expected to increase from 28 million in 2016 to 29 million in 2017 due to the region’s strong labour force growth.”
ILO says poor-quality employment – rather than unemployment – remains the main labour market challenge in sub-Saharan Africa.
“This problem is compounded by rapid population growth, specifically growth of the working-age population.
For example, an additional 12.6 million youth in the region will enter the labour force over the next four years. As such, the region risks forgoing any gains from the potential “demographic dividend” unless sufficient productive opportunities are provided for young people.
Across most of sub-Saharan Africa, the lack of productive opportunities for youth and adults alike means that 247 million people were in vulnerable employment in 2016, equivalent to around 68 per cent of all those with jobs.”