The world is going through a period of multiple crises that have worsened with the repercussions of the war in Ukraine and have cloudy outlook for global labor marketspoints new report of the International Labor Organization (ILO) published this Monday.
According to the study, unemployment will increase, fueling inequality and, if the current trend continues, the job offer will be substantially reduced during the last months of 2022, putting the recovery of the world of work at risk and generating more poverty.
The ILO reported that there are already evidence of a profound slowdown in the labor market and warned that these would favor inequality and disparity between developed and developing economies.
Inflation and reduction of real wages
The report explains that the battered situation of the world economy after the COVID-19 pandemic has implied high levels of inflation, especially in food and energy prices, and that this was aggravated by the conflagration in Ukraine, which has caused a reduction in real wages and has reduced the room for maneuver of governments to apply political measuresin addition to causing an increase in the debt of developing countries.
In a context of crisis and slowdown in economic growth and aggregate demand, the UN agency projects a decreased demand for employment. “Uncertainty and unflattering expectations have an adverse effect on the level of hiring”, he points out.
The ILO recalled that all this disproportionately affects the poorest and most vulnerable population and advocates the implementation of integrated and balanced national and international policies.
Job Recovery Tools
The general director of the organization, Gilbert Houngbo, pointed out that various political tools should be used and called for supporting initiatives such as the UN Global Jobs and Social Protection Acceleratorwhich would allow countries to create 400 million jobs and extend social protection to 4 billion of people who still don’t have it.
He added that an early end to the war in Ukraine would further help improve the employment situation in the world.
Among the political measures proposed by the ILO to face the employment crisis are:
- intervention for set the price of public goodsbased on social dialogue
- Windfall Redirection (particularly in the energy sector) to promote employment and guarantee income
- Increase income security through social protection programmes, including the revision of benefits, in particular pensions, in step with the evolution of the cost of living
- Greater support for secure income and maintain purchasing power income from work, in order to prevent more people from falling into poverty or food insecurity, for example through salary adjustments
- lead the support to the most vulnerable people and companies in order to avoid adverse effects on specific groups or sectors, in particular through measures aimed at fostering job creation and social protection for those most affected, as well as interventions to promote skills development and active labor market policies. work that facilitate their transition and support for companies
Employment decreases by 15.5% in Ukraine in 2022
The report laments the humanitarian impact of the war in Ukraine and details that employment in that country will decrease by 15.5% this year compared to 2021.
The agency estimates that the 10.4% of the workforce that existed in the country before the war has taken refuge in other countries and specifies that the majority of this group of 1.6 million people are women, many of whom worked in the education, health and social assistance sectors.
Until now, the 28% of Ukrainian refugees have found a job salaried, or self-employed, in their host country, although the large number of unemployed displaced persons and refugees in Ukraine and other countries has led to a reduction in wages.
ILO experts say that the conflict in Ukraine affects the labor markets of neighboring countries and recall that this could result in political destabilization and national labor markets.
As for the rest of the world, he reports that war drives inflation, increases food insecurity and deepens poverty.
