ILO: Food Prices, Potential Debt Distress, Among Factors Reversing Labour Market Recovery
The International Labour Organisation (ILO) has stated that recovery in the global labour market is threatened by multiple and interlinked global crises, as well as increasing inequalities.
The ILO in its latest report on the, “World of Work,” said inflation especially in energy and food prices, financial turbulence, potential debt distress, and global supply chain disruption – exacerbated by war in Ukraine – means there is a growing risk of a further deterioration in hours worked in 2022, as well as a broader impact on global labour markets in the months to come.
The 9th edition of the ILO Monitor on the World of Work, released by the UN agency finds that after significant gains during the last quarter of 2021, the number of hours worked globally dropped in the first quarter of 2022, to 3.8 per cent below the pre-crisis benchmark (fourth quarter of 2019).
The report stressed that the above number of hours worked that dropped globally is equivalent to a deficit of 112 million full-time jobs and also represents an important downgrading of figures published by the ILO in January 2022.
According to the report, “Multiple new and interconnected global crises, including inflation (especially in energy and food prices), financial turbulence, potential debt distress, and global supply chain disruption – exacerbated by war in Ukraine – means there is a growing risk of a further deterioration in hours worked in 2022, as well as a broader impact on global labour markets in the months to come.”
The report also finds that a great and growing divergence between richer and poorer economies continues to characterize the recovery.
It added, “While highincome countries experienced a recovery in hours worked, low- and lower-middle-income economies suffered setbacks in the first quarter of the year with a three point six and five point seven percent gap respectively when compared to the pre-crisis benchmark. These diverging trends are likely to worsen in the second quarter of 2022.”
Commenting on the report, Director-General, ILO, Guy Ryder said, “It is now more essential than ever that we work together and focus on creating a human-centred recovery. The global labour market recovery has gone into reverse. An uneven and fragile recovery has been made more uncertain by a self-reinforcing combination of crises. The impact on workers and their families, especially in the developing world, will be devastating and could translate into social and political dislocation.
“In some developing countries, governments are increasingly constrained by the lack of fiscal space and debt sustainability challenges, while enterprises face economic and financial uncertainties and workers continue to be left without sufficient access to social protection.”