The Strategist

ILO: Economic recovery will not overtake the growth of labor force

01/26/2018 - 13:45

Although the world economy is emerging from the crisis, the number of unemployed in the labor markets of developed and developing countries will remain almost at the same level in 2018-2019 (about 200 million people), believes the International Labor Organization. The number of people employed in non-standard labor relations will increase simultaneously with the number of unemployed, as will the number of "working poor".

Although the world economy is recovering from the crisis, the number of labor resources is also growing in most countries. Therefore, the unemployment rate in the world is unlikely to decrease in 2018, the International Labor Organization (ILO) states the report World Employment and Social Outlook: Trends 2018.

The ILO estimates that the world unemployment rate was 5.6% in 2017, and the total number of unemployed exceeded 192 million people. In 2018, according to the organization's forecast, unemployment will drop to 5.5%. However, the absolute number of unemployed will remain at the same level because of the growth in the workforce. In 2019, with the same level of unemployment, the number of unemployed will even grow - by 1.3 million people.

Even more rapidly will grow the number of those employed who, although they have jobs, are involved in non-standard forms of labor relations. These include part-time workers employed in temporary work, remote work and those called to workplaces solely as the production need arises. By the end of 2017, 1.4 billion people were among them, and their number will be growing by 17 million people per year in the next two years.

A relatively negative forecast of the ILO also gives the number of another vulnerable group on the labor market - the working poor. According to ILO, this category includes those employees who live in households with a daily income of less than $ 2. In developing countries, the number of "working poor" is declining too slowly, not being behind the growth of manpower. The number of workers living in extreme poverty in the coming years will not fall below 114 million, or 40% of all workers (in 2018). According to the ILO forecast, it is also unlikely that there will be a significant reduction in the number of moderately poor workers (household income of $ 2-3.1) - now 430 million people are employed in the world. Developed countries are the exception for this trend is, as the working poor there now already account for only 8% of all employed (190 million people). This share will fall in 2018-2019 by 10 million people annually.

Note that although many governments are making efforts to standardize labor relations and reduce the proportion of working poor, the least qualified employees, according to PwC, will gradually "squeeze out" from the labor market. As follows from the company’s report Workforce of the future, the separation between high and low specialists will be growing annually until 2030. For the first, the number of which in the labor force will not exceed 15-20%, the companies will be ready to wage a constant struggle and provide them branched social packs comparable to state social institutions. However, in turn, companies will require them to constantly update their work skills. The second may expect unstable employment combined with the increasing methods of non-material remuneration.