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ILO predicts rise in global unemployment in 2024

ILO

BY OSENI OMOTOLANI

Labour markets have shown surprising resilience despite deteriorating economic conditions, but recovery from the pandemic remains uneven as new vulnerabilities and multiple crises are eroding prospects for greater social justice, according to a new International Labour Organisation (ILO) report.

The ILO’s World Employment and Social Outlook Trends: 2024 (WESO Trends) finds that both the unemployment rate and the jobs gap rate – which is the number of persons without employment who are interested in finding a job – have fallen below pre-pandemic levels. The 2023 global unemployment rate stood at 5.1 per cent, a modest improvement from 2022 when it stood at 5.3 per cent. The global jobs gap and labour market participation rates also improved in 2023.

However, beneath these numbers fragility is starting to emerge, the report finds. It projects that the labour market outlook and global unemployment will both worsen.

In 2024 an extra two million workers are expected to be looking for jobs, raising the global unemployment rate from 5.1 per cent in 2023 to 5.2 per cent.

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Disposable incomes have declined in the majority of G20 countries and, generally, the erosion of living standards resulting from inflation is, “unlikely to be compensated quickly.”

Furthermore, important differences persist between higher and lower-income countries. While the jobs gap rate in 2023 was 8.2 per cent in high-income countries, it stood at 20.5 per cent in the low-income group. Similarly, while the 2023 unemployment rate persisted at 4.5 per cent in high-income countries, it was 5.7 per cent in low-income countries.

Moreover, working poverty is likely to persist. Despite quickly declining after 2020, the number of workers living in extreme poverty (earning less than $2.15 per person per day in purchasing power parity terms) grew by about 1 million in 2023. the number of workers living in moderate poverty (earning less than $3.65 per day per person in PPP terms) increased by 8.4 million in 2023.

Income inequality has also widened, the WESO Trends warns, adding that the erosion of real disposable income, “bodes ill for aggregate demand and a more sustained economic recovery.”

Rates of informal work are expected to remain static, accounting for around 58 per cent of the global workforce in 2024.

Labour market imbalancesThe return to pre-pandemic labour market participation rates has varied between different groups. Women’s participation has bounced back quickly, but a notable gender gap persists, especially in emerging and developing nations.

Youth unemployment rates continue to present a challenge. The rate of people defined as NEET (Not in Employment, Education or Training) remains high, especially among young women, posing challenges to long-term employment prospects.

The report also found that those people who have re-entered the labour market post-pandemic tend not to be working the same number of hours as before while the number of sick days taken has increased significantly.

Productivity growth slowedAfter a brief post-pandemic boost labour productivity has returned to the low level seen in the previous decade. Importantly, the report also finds that despite technological advances and increased investment, productivity growth has continued to slow.

One reason for this is that significant amounts of investment were directed towards less productive sectors such as services and construction. Other barriers include skills shortages and the dominance of large digital monopolies, which hinder faster technological adoption, especially in developing countries and sectors with a predominance of low-productivity firms.

“This report looks behind the headline labour market figures and what it reveals must give great cause for concern. It is starting to look as if these imbalances are not simply part of pandemic recovery but structural,” said ILO Director-General, Gilbert F. Houngbo.

“The workforce challenges it detects pose a threat to both individual livelihoods and businesses and we must tackle them effectively and fast. Falling living standards and weak productivity combined with persistent inflation create the conditions for greater inequality and undermine efforts to achieve social justice. And without greater social justice we will never have a sustainable recovery,” he added.

BudgIT commends FG for publishing the proposed 2024 government-owned enterprises budget

BudgIT, a prominent civic-tech organization promoting transparency, accountability, and effective service delivery in Nigeria, commends the Federal Government of Nigeria for taking a step toward transparency by publishing the 2024 Proposed Budget of its Government-Owned Enterprises, GOEs.

In response to several requests by BudgIT, the Federal Government of Nigeria, for the first time, published the proposed budget for 62 Government-Owned Enterprises on the Budget Office of the Federation’s website. This step comes after BudgIT’s advocacy efforts, including an opinion piece, 2024 Budget: 10 Plagues President Tinubu Must Avoid, published in August 2023, urging the administration to make the GOEs’ budget public.

Additionally, on December 11, 2023, we raised concerns about the absence of GOEs’ budget in the 2024 Appropriation Bill, drawing attention through another opinion piece, 2024 Budget: Issues Begging for Attention.

“As a result of this unprecedented feat, we commend the Federal Ministry of Budget and National Planning and the Budget Office of the Federation for heeding several calls made over the years by BudgIT and other civil society actors on the need for increased transparency in GOE operations”, BudgIT said.

While disclosing the proposed 2024 GOEs’ budget is crucial in spotlighting these revenue-generating entities, further disclosure of its Approved Budget and previous years’ Budget Implementation Reports is vital to foster accountability.

“To this end, we urge the Federal Ministry of Budget and National Planning and the Budget Office of the Federation to continue in their effort to ensure transparency in the use and allocation of government resources. We anticipate that the Ministry will make public comprehensive details of the 2024 Approved Budget to keep citizens informed and empowered to engage with the government across all levels”, opined BudgIT.

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