World Employment and Social Outlook: Trends 2025 | 21 Jan 2025

Source: TH 

Why in News? 

The International Labour Organisation’s (ILO) has released its "World Employment and Social Outlook (WESO): Trends 2025" report, highlighting that the global unemployment rate remained at a historic low of 5% in 2024.  

• The report points to ongoing challenges such as slow economic recovery, geopolitical tensions, climate change, and social uncertainties affecting the labor market. 

What are the Key Highlights of the WESO Trends 2025 Report? 

• Steady Global Unemployment: The global unemployment rate held steady at 5%  in 2024, with youth unemployment notably high at 12.6%.  

• Youth unemployment is highest in upper-middle-income countries at 16%, and lower in low-income countries at 8%, often due to underemployment and informal work. 

• This group faces significantly higher unemployment compared to adults. 

• Low-income countries (LIC) face challenges in generating decent jobs, and informal employment has returned to pre-pandemic levels. 

• Regional Disparities in Employment: In Sub-Saharan Africa, employment growth is largely in the informal sector, where workers lack stability and social protection, where around 62.6% of households live on less than USD 3.65 per day.  
  • Similarly, in other developing countries, while employment is growing, many workers remain in vulnerable, low-paying, and informal jobs. 
• Economic Growth Trends: Economic growth for 2024 was recorded at 3.2%, slightly down from 3.3% in 2023 and 3.6% in 2022.  
  • The report forecasts a similar economic expansion in 2025, followed by a gradual deceleration in the medium term. 
• Global Jobs Gap: The global jobs gap (i.e. number of people who desire work but are unable to find it)  stood at 402 million in 2024. 
  • This includes 186 million unemployed individuals, 137 million discouraged workers, and 79 million who are unable to seek employment due to caregiving responsibilities. 
  • While the gap has narrowed since the Covid-19 pandemic, it is expected to stabilize in the coming years. 

• Labour Force Participation: Labour force participation has increased in advanced economies, particularly among older workers and women and it has declined in low-income nations, contributing to slower employment growth globally. 
• NEET Statistics: In 2024, the global NEET (Not in Education, Employment, or Training) population reached 259.1 million, with 85.8 million young men (13.1%) and 173.3 million young women (28.2%).  
  • LICs saw a sharp rise, with youth unemployment worsening. NEET rates among young men increased by 4% points above pre-pandemic levels. 
• Debt Distress: High interest rates and economic challenges have resulted in unsustainable public debt, particularly in developing countries.  
  • Around 70 nations are at risk of debt distress, with many spending more on servicing debt than on essential services like health and education.  
  • Example: In Africa, the median public debt stands at about 65% of Gross Domestic Product (GDP). 
• Stagnant Wages Amid Shifting Labor Dynamics: Real wage growth remains weak post-pandemic due to low employment growth and a shift in labor market power toward employers.  
• Green Transition: The renewable energy sector saw global employment rise from 13.7 million in 2022 to 16.2 million in 2023, driven by investments in solar and hydrogen energy, but benefits are unevenly distributed, with 46% in China. 
  • The digital sector offers job potential, though many countries lack the necessary infrastructure and skilled workforce to capitalize on it. 

What are the ILO Recommendations for Achieving Social Justice and SDGs by 2030? 

• Leverage Remittances: ILO recommends that LICs, especially in Sub-Saharan Africa, should channel remittances into productive investments rather than consumption.  
  • Governments can create mechanisms to consolidate remittances into investment funds, boosting private sector growth and long-term development. 
• Structural Transformation: Countries should address structural bottlenecks by focusing on modern services and manufacturing to create quality jobs, reducing regional disparities through investments in infrastructure, education, and skills training. 
• Youth skill development: Provide quality education and training to youth, ensuring that they are equipped with the skills necessary for participation in modern labor markets and to take advantage of emerging industries like green energy and technology. 
• International Collaboration: Promote global cooperation, sustainable growth, and inclusive fiscal and monetary policies that benefit all workers.