Global labour market still struggling despite economic growth

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As the UK government announces that the number of people in a job has risen by 280,000 taking the country’s workforce to 30.15 million, the global picture of employment is less positive, according to the International Labour Organisation.

The modest recovery experienced by the global economy in 2013, with an increase in profits for corporations and a strong year ahead predicted for global equity markets, has not resulted in employment growth, it said.

The global unemployment rate remained at 6% of the labour force in 2013, unchanged from the previous year, meaning large numbers of discouraged potential workers are still outside the labour market, according to the Global Employment Trends 2014 report.

And for young people, the labour market outlook worsened in almost every region, as the youth unemployment rate reached more than 13%.

Job creation is simply too weak to reduce unemployment significantly, meaning jobseekers remain unemployed for longer and longer periods, according to Ekkehard Ernst, the main author of the report.

“They become frustrated with their limited employment opportunities and drop out of the labour market,” he added. “Or they are forced to look for alternative opportunities outside their field of qualification and accept jobs below their skill level.

“Both discouragement and skills mismatch have increased substantially since the beginning of the crisis. And both will make the labour market recovery more protracted.”

In developing countries, informal employment remains widespread, and the pace of improvements in job quality is slowing down. That means fewer people are moving out of working poverty, the report revealed.

A switch to more employment-friendly policies and rising labour incomes would boost economic growth and job creation, the report says. In emerging and developing countries, it is crucial to strengthen social protection floors and promote transitions to formal employment. This too would support aggregate demand and global growth, the report concludes.