World Employment and Social Outlook Trends 2020

The International Labour Organization (ILO) recently released its principal report of the upcoming year of 2020. The "World Employment and Social Outlook: Trends 2020" publication brings to the forefront the trends seen in the global workforce whether and how they are enhancing or inhibiting economic growth. The organization identified four forces that are changing the way we work and grow as a global society.

As seen by the growth of inequality in most economies, "the lack of inclusiveness" is likely to "impair the ability of lower-income countries to reduce poverty and improve working conditions" especially in conditions of slower economic expansion. Despite largescale technological advancements that cause low-income economies to see an accelerated growth rate in high productivity jobs, those economies have lagged against their higher-income, more industrialized peers. The report points out that "between 2000 and 2018, the employment share of agricultural and elementary occupations declined by only 6 percentage points in low-income countries, whereas it declined by 10 percentage points in lower‑middle‑income countries and by 15 percentage points (in upper-middle-income countries."

The report also contemplates the use of  "total labour underutilization" as a more accurate of individuals not in the workforce as unemployment struggles to tell the whole story. In 2019, the ILO sees total unemployment across the world at 188 million. However, this doesn't technically include the 165 million people it found were underemployed (wished they had more hours) or the 120 million marginally attached to the labor market. This suggests "total labour utilization" actually includes about 470 million individuals. While this figure has been shrinking with global job gains, those gains were focused in the service sectors of high-income economies where the marginal value added is lowest.

The global economy indeed added large swaths of jobs in 2019, but that did little to reduce the amount of low-quality employment that workers took. Last year, the ILO counted 630 million workers, or 19 percent, that were still in extreme or moderate poverty despite being employed. This is consistent with the trend of workers seeing a lower share of labour income. The ILO estimates that "The labour income share declined at the global level from 54 percent in 2004 to 51 percent in 2017."

Naturally, this third trend leads to an increase in inequality across most labor markets, the last trend highlighted by the ILO. Low-income economy workers see this problem the most. In these countries, the employment-to-population ratio of 68 percent is the highest in the world, but these large employment rates are unable to prevent 66 percent of workers from living in poverty. The search for better quality jobs has seen a surge in urban populations with 55 percent of the world's working-age population living in urban areas in 2019, up from 50 percent in 2005. Gender inequality remains a major problem in the global economy as well. The ILO reports that the 2019 female labour force participation rate was 47 percent while the global male participation rate was 74 percent. Finally, the younger 15-24 age segment finds itself at a disadvantage in the labour market with 22 percent, unemployed, uneducated, and untrained.


Popular posts from this blog

2018 Q2 Manufacturers' Outlook Survey: Positive Sentiment Before Trade War Begins

Airbus, Boeing: Long-Term Aerospace Industry Growth Outlook

A Deflated Earnings Season