Employment and Social Trends 2026 Report: ILO

Syllabus: GS3/Economy; Employment

Context

• Recently, the International Labour Organization (ILO) released its latest World Employment and Social Outlook (WESO) Report highlighting persistent inequalities in the global labor market.

Key Findings of Report

• Global Unemployment: The global unemployment rate is projected to remain at 4.9% in 2026, equivalent to 186 million people.
  • However, progress toward decent work has stagnated, with millions still lacking access to quality, secure employment.
• Persistent Poverty Despite Economic Growth: Nearly 300 million workers live in extreme poverty, earning less than US$3 per day.
  • Informality is increasing, about 2.1 billion workers aim to hold informal jobs by 2026, largely concentrated in Africa and Southern Asia.
  • Low-income countries face severe challenges in transitioning to higher-value industries, limiting productivity and job security.
• Youth Employment Crisis Deepens: Youth unemployment rose to 12.4% in 2025.
  • Around 260 million young people are Not in Education, Employment, or Training (NEET), a rate of 27.9% in low-income countries.
  • AI and automation threaten to intensify challenges for young job seekers, especially educated youth in high-income economies.
• Persistent Gender Gaps: Women make up only two-fifths (40%) of global employment.
  • They are 24% less likely than men to participate in the labour force.
  • Gender equality progress has stalled, driven by social norms and structural barriers.
• Demographic Shifts Reshaping Labour Markets: Ageing populations in rich countries are slowing labour force growth.
  • Rapid population growth in poor nations is not translating into productive jobs.
  • Projected employment growth for 2026:
    • 0.5% in upper-middle-income countries;
    • 1.8% in lower-middle-income economies;
    • 3.1% in low-income countries;
  • Weak labour productivity in poorer regions is widening global inequalities.
• Trade Uncertainty Threatens Job Stability: Global trade disruptions and supply chain bottlenecks are cutting into wages, especially in Asia and Europe.
  • Trade supports 465 million jobs worldwide, with over half in Asia and the Pacific.
  • Digitally delivered services now make up 14.5% of global exports.
  • Trade remains a powerful driver of decent work but unevenly benefits regions.
• Inequality Between Regions Widening: Productivity gaps between advanced and developing economies are deepening.
  • Low-income countries are at risk of missing their demographic dividend due to weak job creation and limited investment.
• Regional Labour Market Variations: The ILO forecasts that Latin America and the Caribbean may continue reducing unemployment rates in the medium term, while Northern America could face worsening conditions.
  • The broader labour underutilisation (jobs gap) is projected at 408 million people in 2026, indicating widespread hidden unemployment and underemployment beyond official figures.

Key Policy Recommendations By ILO

• Investing in skills, education, and infrastructure to boost productivity and job quality.
• Addressing gender and youth gaps through inclusive participation and responsible technology adoption.
• Strengthening trade and decent work outcomes, ensuring global benefits are shared equitably.
• Mitigating risks from debt, AI disruption, and trade volatility via coordinated global and domestic policies.

Source: TH