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ILO has Lowered its Prediction for Labour Market Recovery in 2022

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In comparison to the fourth quarter of 2019, the International Labour Organization (ILO) has lowered its prediction for labour market recovery in 2022, estimating a global deficit in hours worked equivalent to 52 million full-time employment. In May 2021, the previous full-year forecast predicted a deficit of 26 million full-time equivalent employment.
According to the ILO World Employment and Social Outlook – Trends 2022 (WESO Trends), this forecast is an improvement over the scenario in 2021, however, it is still nearly 2% lower than the number of worldwide hours worked before the pandemic.

The Future of Global Employment

Until at least 2023, global unemployment is anticipated to stay above pre-COVID-19 levels, according to ILO. The population is expected to reach 207 million in 2022, up from 186 million in 2019. Because many people have left the labour force, the overall impact on employment is substantially more than shown in these data, as per the report. The global labour force participation rate is expected to be 1.2 percentage points lower in 2022 than it was in 2019.

Implications of the Lower Rate of Employment

The lower forecast for 2022 reflects, in part, the impact that recent COVID-19 variations, such as Delta and Omicron, are having on the workplace, as well as major uncertainty about the pandemic’s future course.
The WESO Trends report warns that the impact of the crisis varies dramatically between groups of employees and countries. Regardless of development status, these discrepancies are widening inequities within and between countries and eroding the economic, financial, and social fabric of practically every country. Repairing the damage will most certainly take years, with long-term implications for labour force participation, household incomes, and social and – possibly – political cohesiveness.

Recovery of Global Labour Markets

Guy Ryder, ILO Director-General has said, “There can be no real recovery from this pandemic without a broad-based labour market recovery. And to be sustainable, this recovery must be based on the principles of decent work – including health and safety, equity, social protection and social dialogue.”

The effects of the pandemic are being felt in labour markets in all regions of the world. The recovery of these markets are not at the same pace across the world. The European and the North American regions are showing the most encouraging signs of recovery, while South-East Asia and Latin America and the Caribbean have the most negative outlook. At the national level, labour market recovery is strongest in high-income countries, while lower-middle-income economies are faring worst.
The disproportionate impact of the crisis on women’s employment is expected to last in the coming years, the report says. While the closing of education and training institutions “will have cascading long-term implications” for young people, particularly those without internet access.
Two years into this crisis, the outlook remains fragile and the path to recovery is slow and uncertain,” said ILO Director-General, Guy Ryder. “We are already seeing potentially lasting damage to labour markets, along with concerning increases in poverty and inequality. Many workers are being required to shift to new types of work – for example in response to the prolonged slump in international travel and tourism.”
“There can be no real recovery from this pandemic without a broad-based labour market recovery. And to be sustainable, this recovery must be based on the principles of decent work – including health and safety, equity, social protection and social dialogue,” he added.
The WESO Trends report offers detailed labour market forecasts for 2022 and 2023. It assesses how global labour market recovery has progressed, taking into account various national approaches to pandemic recovery and examining the implications on various kinds of workers and economic sectors.