‘Sharp’ global labour market slowdown underway: UN

AFP: The war raging in Ukraine and other overlapping crises are taking a toll on labour markets worldwide, the UN said yesterday, suggesting a “sharp” slowdown was already underway.

In a fresh report, the International Labour Organisation cautioned that the outlook for global labour markets has deteriorated in recent months.

“The ILO projects that if current trends continue, global employment growth will deteriorate significantly in the last three months of this current year 2022 and unemployment might start increasing,” agency chief Gilbert Houngbo told reporters.

The UN agency warned that multiple, overlapping crises, compounded by Russia’s war in Ukraine, were piling up with the world still in the grips of the COVID-19 pandemic.

Amid deepening energy and food security crises, swelling inflation, tightening monetary policy and fears of a looming global recession, it said both employment creation and the quality of jobs were declining.

“While it normally takes time for an economic slowdown or a recession to result in job destruction and unemployment, available data suggests that a sharp labour market slowdown is already underway,” the report said.
At the beginning of this year, as the world began recovering from the height of the pandemic, employment-to-population ratios returned to or even exceeded pre-COVID-crisis levels in most advanced economies.

ILO said this uptick was especially apparent in high-skilled occupations -- but cautioned that it was also driven by a surge in informal jobs, where social protections are generally lacking.

The situation has worsened in recent months, ILO said, estimating that overall hours worked was 1.5 percent below pre-pandemic levels in the third quarter.

That amounts to a deficit of 40 million full-time jobs.

As the number of jobs available is shrinking, surging inflation is causing real wages to fall in many countries, as many households are still grappling with pandemic-induced income declines, it said.

Yesterday’s report highlighted in particular the dire employment situation in Ukraine itself since Russia invaded in February.

Houngbo said the war had caused “a dramatic effect on Ukraine’s own labour market.”

Inflation in the conflict-torn country is expected to top 30 percent by the end of the year, while ILO estimated employment there would be 15.5 percent below the 2021 level.  That means 2.4 million jobs lost since the start of the war -- half the number predicted by ILO in April, when the number of areas in Ukraine under occupation or facing active hostilities was higher.