On Monday, the International Labour Organisation (ILO) in the 10th edition of its monitoring report on the World of Work said that global employment growth will “deteriorate significantly” in the upcoming quarter of 2022. The report has attributed this fall to the economic turmoil caused by the Russian invasion of Ukraine as well as the tighter monetary policy on consumption.
“On current trends, global employment growth will deteriorate significantly in the fourth quarter of 2022,” said the United Nations body, citing 40 million fewer full-time jobs between July-September this year when compared to the fourth quarter in 2019, the year prior to the pandemic being the benchmark level.
While early 2022 witnessed a recovery in the global hours worked was reserved in the second and third quarters which the report says is due to the reintroduction of Covid-related restrictions which have caused a disruption in the Chinese labour market. Additionally, deterioration is also due to the ongoing conflict in Ukraine which has consequently led to inflation and adversely affected energy and food exports.
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The ILO has also raised an alarm about the declining job vacancies and rise in unemployment in the upcoming months noting the sharp declines in vacancy growth as well as signs of the labour market cooling considerably in advanced economies. This also comes amid several major companies across the world announcing job cuts affecting thousands of people across the world.
According to the report, “the outlook for the labour market is currently highly uncertain, with growing downside risks, including the impacts of high inflation, tightening monetary policy, increasing debt burdens and declining consumer confidence.”
“We cannot insist enough on the need for social packages and the need to ensure that the monetary tightening to combat the inflation is really dovetailed with social measures,” said the ILO director-general Gilbert Houngbo during a press conference.
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Similarly, the report shows how excessive policy tightening could adversely affect “jobs and incomes in both advanced and developing countries”. Houngbo has also called for a series of policies aimed at supporting those most affected, which reportedly includes redirecting some of the windfall corporate profits towards jobs or income support.
“Tackling this deeply worrying global employment situation, and preventing a significant labour market downturn, will require comprehensive, integrated and balanced policies both nationally and globally,” said the new director-general in a statement.
(With inputs from agencies)
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