G20 Labour and Employment Ministers’ Meeting

ILO Director-general presentation on Global Employment Trends 2023

In his presentation to the G20 Ministers gathered in Indore (India) on 20-21 July, Gilbert F. Houngbo emphasized the need for creating policy space for decent and productive employment and social protection.

Declaración | Indore, India | 21 de julio de 2023
(PowerPoint Presentation: Slide 1)

Chair, thank you for this opportunity to address this important meeting today. Please allow me to compliment you and the Government of India on your chairmanship and the good organization of these G20 meetings.

Chair, Ministers and colleagues,

As we meet here today, the world continues to grapple with global shocks and risks that have slowed progress on sustainable development and have challenged social justice. In the ILO’s 11th Monitor on the World of Work that Brazil just referred to, launched at the end of May, we have evaluated the impact of these shocks on decent work.

(Slide 2: Unemployment is falling globally...)

The statistics on this slide reveal a troubling divide between the global average and the situation prevailing in much of the developing world.

As you see in this slide, at a global level unemployment is likely to fall below its pre-pandemic level in 2023, with a global unemployment rate estimated at 5.3 per cent.

(Slide 3: ... but with regional differences: the risk of a further employment divide)

Yet, the global picture hides significant imbalances at the regional level. Unemployment in low-income countries is not expected to recover to the pre-pandemic levels in 2023. And while some regions, such as Latin America and the Caribbean, and Central and Western Asia have reduced unemployment rates substantially below pre-crisis levels, our data show that this is mainly through the creation of work in the informal economy.

(Slide 4: The global jobs gap: Confirming the employment divide and gender gap)

The global jobs gap encompasses all individuals wanting to work but not necessarily actively looking for work. That global jobs gap is projected at 453 million people in 2023, which is made up of 191 million who are unemployed globally, as well as 262 million people who want to work, but do not qualify as unemployed. This shows the magnitude of the employment challenges that the world faces.

The indicator also reveals a significant disparity between gender, with women experiencing a much higher jobs gap rate (at 14.5 percent) than men.

Low-income countries have the highest jobs gap rate at 21.5 percent. In stark contrast, high-income countries have the lowest rate at 8.2 percent.

So what is alarming for us is that low-income countries have witnessed a steady rise in the jobs gap rate over the past years, from 19 percent in 2005, increasing to 21.5 percent in 2023.

(Slide 5: Countries in debt distress face highest jobs gap)

The challenges are even bigger for developing countries in debt distress. As you see on this slide, the jobs gap reaches a staggering 25.7 percent in these countries, significantly higher than in other developing countries. The tightened financial conditions facing developing countries, including higher debt service costs, are also resulting in shrinking fiscal space and are limiting investments in the real economy, including for much-needed employment and social protection programmes.

(Slide 6: The positive impact of old-age pensions)

So we must ask ourselves, what can be done?

Essentially, we need to create policy space for employment and social protection. There are, for example, only 2 in 5 older persons in lower-middle-income countries who receive an old-age pension, and a mere 1 in 4 in low-income countries.

And that is particularly unfair, because these are people who did not enjoy decent work throughout their working life - those who had no access to social protection.

There is, however, a glimmer of hope.

As shown on this slide, our calculations indicate that the expansion of basic old-age pensions in developing countries has the potential to increase GDP per capita by 14.8 percent within ten years.

Implementing basic old-age pensions would also contribute to a 6-percentage point reduction in the population living below the $2.15 PPP poverty line, and a 2.5-percentage point increase in the income share of the bottom 40 percent of the income distribution.

Furthermore, the effects of providing basic pensions to all would narrow the gender gap in labour income by 3.6 percentage points, a result equivalent to the global progress in reducing gender gaps achieved in the past 15 years.

Taking again the same example, the annual cost of providing basic old-age pensions represents just 1.6 percent of GDP in developing countries. In sub-Saharan Africa, the cost is 1.4 percent of GDP, which is equivalent to approximately 12.5 per cent of global annual official development assistance.

And with strategic planning, dialogue and collaboration, these costs can be managed, offering protection – and hope – for millions of people.

In other words, investing in national social protection systems, based on equitable and sustainable financing through taxes and social contributions, is imperative to close the growing divides.

(Slide 7: In conclusion)

This brings me to my last slide.

At present, the global decent work divide is deepening in the face of global shocks and risks, with low-income countries being left further behind.

To tackle this situation and to promote social justice, more global resources must be mobilized. Initiatives such as the UN Global Accelerator on Jobs and Social Protection for Just Transition launched by UN Secretary-General Guterres can play a pivotal role in generating the necessary technical and financial support. Such endeavours need to be part of a broader reform of the international financial architecture to make more resources available for achieving the SDGs.