Global unemployment rate will only recover in 2023

We have been living with COVID-19 for over two years now. The novel coronavirus first emerged in Wuhan, China, on 31 December 2019, and then quickly spread across the world. The World Health Organization (WHO) then declared a pandemic on 11 March 2020. 

Since then, COVID-19 has continued to evolve and mutate, creating new waves of the pandemic globally. The latest variant of concern has been named Omicron by the WHO.

It’s impact on the world of work has caused the International Labor Organization (ILO) to downgrade its labor market recovery forecast for 2022.

Back in the summer, the ILO predicted that the deficit in the number of hours worked globally in 2022 would be the equivalent to 26 million full time jobs.

Now it has doubled it to 52 million full time jobs; this is 2% lower than pre-pandemic levels. But, importantly this is lower than the figure for 2021 – 125 million full time jobs.

The ILO has also predicted that the global unemployment rate will therefore remain above pre-pandemic levels until 2023. 186 million people globally were unemployed in 2019, compared to 207 million for 2022. Importantly, this is a 7 million decline on 2021 figures.

Labor force participation also remains 1.2 percentage points below 2019 figures in 2022. In addition, 30 million more adults fell into extreme poverty in 2021.

Talking about the outlook, ILO director general Guy Ryder commented: “Two years into this crisis, the outlook remains fragile and the path to recovery is slow and uncertain.

“We are already seeing potentially lasting damage to labor 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.”

Unpicking the temporary work trend

A major trend associated with the COVID-19 pandemic has been that temporary work has emerged as a buffer – according to the ILO, this is a very common in economic crises.

While temporary work can “serve a shock absorber”, the ILO argues that “in the longer-term, temporary employment can negatively impact on the long-term productivity of firms through its effects on job retention, training and innovation.”

“Workers are also adversely affected by temporary work, given the greater job and income insecurity and lower access to social protection,” according to the ILO’s report.

A major concern is that “over a quarter of those in temporary work in the early part of 2021 (in countries with available data) were previously in non-temporary jobs, which highlights the underlying economic uncertainty and associated employment insecurity at that time.”

So what must be done to aid recovery? The ILO calls on a human-centric policy agenda based around four pillars: inclusive economic growth, protection of all workers, universal social protection and social dialogue.

The second pillar is the most important for temporary workers, who deserve decent work as much as permanent workers.

While gig workers in some Western countries may have had a better deal in 2021 than ever before, there is much more work to be done to look after and protect the entire workforce. And doing so is good for broader economic recovery and progress.