ILO warns of rise in unemployment, decline in real wages

Key Findings

1. Macroeconomic Deterioration in 2023

• Despite joblessness falling below pre-pandemic levels, the report raises concerns about persisting social inequalities and stagnant productivity.
• The report notes a significant deterioration in the macroeconomic environment in 2023.
• Geopolitical tensions and inflation led to aggressive moves by central banks, impacting global industrial activity, investment, and trade.

2. Global Growth and Labour Market Resilience

• Despite economic challenges, global growth in 2023 exceeded expectations, with labour markets showing resilience.
• Strong job growth led to improvements in both the unemployment rate and the jobs gap, although the latter remained elevated at nearly 435 million.

3. Concerns about Structural Labour Market Imbalances

• The report warns that labor market imbalances may be structural rather than cyclical, even as imbalances eased in 2023.

4. Real Wage Decline and Increase in Extreme Poverty

• Real wages declined in most G20 countries due to wage increases lagging behind inflation.
• Workers in extreme poverty (earning less than $2.15 per day in PPP terms) increased by about one million globally in 2023.

5. Positive Real Wages in India and Other Countries

• Real wages in India are reported as "positive" compared to other G20 nations, with positive growth also observed in China, Russia, and Mexico.
• China and Russia experienced the strongest wage gains due to high labor productivity growth.

Prelims Takeaway

• ILO
• World Employment and Social Outlook