By Dr. Gyan Pathak
The global jobs gap in 2023 would be 453 million, which amounts to 11.7 per cent, more than double the level of current gap. It would be much higher among women at 14.5 per cent than men at 9.8 per cent. This level of global unemployment is certainly be below the pandemic level, but it would reflect stronger-than-expected resilience in high-income countries rather than a generalized recovery in the labour market.
While providing this data encapsulated by the ILO’s jobs gap indicator, the latest ILO Monitor on the World of Work, has said that various global shocks and risks are holding back labour market recovery, especially in low- and middle-income countries. In developing countries, responding to the current multiple crises in constrained by a combination of high inflation and high interest rates, along with a growing risk of debt distress.
The global jobs gap of 453 million includes both the 191 million unemployed people and an additional 262 million who want employment but do not qualify as unemployed. Those without a job but not classified as unemployed include, for instance, people who are discouraged from searching and those currently unable to take up employment at short notice, such as persons with care responsibilities.
On the other hand, progress has been slow in improving access to social protection, the report says. A decade has passed since the Social Protection Floors Recommendation, 2012(No. 202), was adopted, yet still more than half of the world’s population lacks access to any form of social protection.
Precipitated by the war in Ukraine and the lingering effects of the COVID-19 pandemic, the ongoing cost-of-living crisis has hurt incomes and livelihoods around the world, especially in developing countries, the report underscored. Moreover, the global GDP growth is expected to decelerate to 2.8 per cent this year, down from 3.4 per cent in 2022. This slowdown masks a significant divergence between advanced and developing economies.
Without action on jobs and social protection, low-income countries will be left further behind, the report has warned referring to low-income countries in Africa and Arab States which are in very bad shape even now, and are unlikely to recover to pre-pandemic levels of unemployment this year.
Low-income counties will be facing the largest jobs gap rate at 21.5 per cent, while the rate in middle-income countries, the category in which India falls, would be slightly above 11 per cent. High income countries to register the lowest rates, at 8.2 per cent. Low-income countries are the only country income group that has seen a long-term rise in jobs gap rate, from 19.1 per cent in 2005 to 21.5 per cent in 2023.
Low-income countries in debt distress face a jobs gap of 25.7 per cent in 2023, compared with 11 per cent in the developing countries, indicating that financial and fiscal constraints are hampering their policy responses, further worsening labour market conditions.
Some countries are facing particularly complex and cascading crises, which interact with broader global challenges and exacerbate labour market impacts. They range from natural disasters (e.g. the earthquakes in Türkiye and Syrian Arab Republic) to multiple economic shocks (e.g. in Sri Lanka), which have come on top of the lingering effects of theCOVID-19 pandemic and the global cost-of-living crisis.
Significant social protection policy gaps remain in developing countries, especially in low-income countries, including in regard to old-age pensions. Only 38.6 per cent of older persons in lower-middle-income and 23.2 per cent in low-income countries receive an old-age pension. Investing in national social protection systems based on equitable and sustainable financing from taxes and social contributions and complemented by international support where needed, is necessary and will bring economic, social and employment benefits.
The ILO’s new estimates confirm that building a national social protection floor, for example, through expanding basic old-age pensions in developing countries would increase GDP per capita in low- and lower-middle-income countries by 14.8 per cent within 10 years. Such basic old-age pensions in developing countries would also reduce the share of the population living below the US$2.15 PPP poverty line by 6 percentage points and increase the income share of the bottom 40 per cent of the income distribution by 2.5 percentage points. Furthermore, the induced effects of basic pensions would reduce the gender gap in labour income by 3.6 percentage points, equivalent to the global progress registered in the last 15 years.
The report pointed out that the required financial resources for expanding basic old-age pensions are large but not insurmountable. For developing countries, the annual cost of providing basic old-age pensions at the level of national poverty lines is equivalent to1.6 per cent of GDP (2.3 per cent and 1.5 per cent of GDP for low-income and lower-middle-income countries, respectively). For sub-Saharan Africa, the cost would be US$23.3 billion, or 1.4 per cent of GDP and approximately 12.5 per cent of global annual official development assistance.
The UN Global Accelerator on Jobs and Social Protection, and the Global Coalition for Social Justice, can build global resources to achieve basic old-age pensions, as one part of a reform of the international financial architecture to better address the needs of lower-income countries, the ILO monitor concluded. (IPA Service)
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