Global unemployment rate set to decline slightly in 2024

The number of workers in informal employment has grown from approximately 1.7 billion in 2005 to two billion in 2024. Photo: AFP

The global unemployment rate is expected to fall slightly to 4.9 per cent this year from 5 per cent in 2023, even as inequalities in labour markets persist, the International Labour Organisation (ILO) said on May 29.

Unequal access to jobs is still a problem worldwide, particularly for women in poorer countries, it added. 

Despite efforts to reduce global inequalities, the labour market remains an uneven playing field, especially for women.

Key points of the report:

• The ILO’s World Employment and Social Outlook: May 2024 Update predicts that the 2024 global unemployment rate will stand at 4.9 per cent. 

• The figure revises downward the previous ILO projection of 5.2 per cent for this year. However, the downward trend for joblessness is expected to flatten in 2025, with unemployment remaining at 4.9 per cent.

• Women, especially in low-income countries, are disproportionately affected by the lack of opportunities. The jobs gap for women in low-income countries reaches a striking 22.8 per cent, versus 15.3 per cent for men. This contrasts with high-income countries, where the rate is 9.7 per cent for women and 7.3 per cent for men.

• These differences are just the “tip of the iceberg”, as significantly more women than men are completely detached from the labour market. 

• The report finds that family responsibilities can explain much of the difference seen in women’s and men’s employment rates. Globally, 45.6 per cent of working-age women are employed in 2024, compared to 69.2 per cent of men. 

• Even when women are employed, they tend to earn far less than men, particularly in low-income countries. While women in high-income countries earn 73 cents compared to a dollar earned by men, this figure drops to just 44 cents in low-income countries.

• More generally, despite the adoption of the 2030 Agenda for Sustainable Development in 2015, progress in reducing poverty and informality has slowed down in comparison to the previous decade. 

• The number of workers in informal employment has grown from approximately 1.7 billion in 2005 to two  billion in 2024. This indicates that the promise of the 2030 agenda will require more than “growing out” of poverty and informality.

The need for a comprehensive approach to achieve goals

• Economic growth is an important driver of labour market conditions, such as unemployment, and sustainable development. Since 2015, the year the Sustainable Development Goals were adopted, global GDP per capita has grown at a yearly rate of 1.8 per cent.

• While GDP growth remains crucial for development, it is essential to measure and monitor social progress indicators beyond economic activity alone. 

• Global trends suggest a slowdown in progress towards reducing poverty and informality since 2015. Moreover, the link between these indicators and economic growth has diminished. 

• This highlights the need for a comprehensive approach to achieve the objectives of the 2030 agenda, including social dialogue at all levels, aimed at promoting inclusive, equitable, and effective public policies that resonate with societal needs and promote human dignity for all.

What’s holding women back?

• In 2024, the ILO estimates that 45.6 per cent of women (aged 15 and above) are employed, compared to 69.2 per cent of men, a gap of 23.6 percentage points. This gap is much larger than what the labour underutilisation indicators would imply, including the most broadly defined jobs gap indicator.

• An analysis shows that family responsibilities are a key driver of the gender gap in employment rates. The contributions of family responsibilities to the observed gender gaps in employment are generally large.

• In low-income countries, the estimated effect of family responsibilities accounts for 62 per cent of the gender employment gap. In high-income countries this share reaches 80 per cent and it is close to 76 per cent in middle-income countries.

• Given these results, it seems likely that social norms concerning the organisation of unpaid care work, coupled with deficits in care services, are critical factors behind the observed employment penalties. 

• First, women generally bear disproportionate childcare responsibilities. Moreover, the effect of this can become entrenched through a deterioration of job prospects that can last well beyond the first few years of a child’s life. 

• Second, even in the absence of children in the household, women devote a disproportionate amount of time to unpaid care work compared to men.

• There is a disproportionate share of time devoted to unpaid care work beyond childcare, whether for household upkeep or care of relatives other than children.

• Even when women are employed, they face stark gender inequalities – particularly in the developing world. Employed women earn 73 cents to the dollar compared to employed men in high-income countries. In low-income countries, women earn just 44 cents to the dollar. This reflects severe deficits in employment quality for women, who are overrepresented in vulnerable jobs. 

• It can be seen that gender differences in wages are larger in informal employment than in formal employment.

• Women in formal employment register wage increases of 2.1 per cent per year of tenure, while in informal employment they can expect gains of only 0.8 per cent.

• This means that women who enter an informal job can expect to be on a flatter long-run income trajectory than both women employed in formal jobs and men employed either formally or informally.

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