The International Labour Organization’s (ILO) 2025 World Employment and Social Outlook report paints a concerning picture of global labour markets grappling with a confluence of challenges. Geopolitical instability, the escalating costs of climate change, and unresolved debt burdens are creating a perfect storm, hindering the full recovery of labour markets from the lingering effects of the pandemic and exacerbating existing inequalities. While global employment managed to keep pace with the growing labour force in 2024, maintaining a steady unemployment rate of 5%, this seemingly stable figure masks underlying vulnerabilities and persistent disparities. Youth unemployment, a critical indicator of future economic prospects, remained stubbornly high at 12.6%, signaling a precarious situation for young people entering the workforce. The resurgence of informal work and working poverty to pre-pandemic levels, particularly in low-income countries, further underscores the fragility of the current economic landscape.
The report highlights a global economic slowdown as a key driver of these labour market challenges. Economic growth in 2024 dipped to 3.2%, marking a decline from the previous two years. While a similar growth rate is projected for 2025, the ILO anticipates a gradual deceleration in the medium term, raising concerns about the long-term health of the global economy and its ability to generate sufficient quality jobs. Although inflation has moderated, it persists at elevated levels, eroding the real value of wages and impacting household purchasing power. The uneven distribution of wage growth, with real wage increases concentrated primarily in advanced economies, further exacerbates global inequalities. Many countries, particularly in the developing world, continue to grapple with the economic fallout of the pandemic and the inflationary pressures that have followed, hindering their ability to create decent work opportunities and improve living standards.
The report reveals stark disparities in labour force participation rates across different income groups and demographics. Low-income countries experienced a decline in labour force participation, while high-income nations witnessed an increase, driven primarily by older workers and women. Despite this increase in female participation, significant gender gaps persist, limiting progress towards greater economic equality. Alarmingly, the report documents a sharp decline in labour force participation among young men, particularly in low-income countries, with a significant number falling into the NEET category (Not in Education, Employment, or Training). This trend leaves these young men vulnerable to long-term economic marginalization and poses a significant challenge for future economic development.
The rise in NEET rates among youth is a particularly worrisome trend. Globally, 85.8 million young men and 173.3 million young women were classified as NEET in 2024, representing a substantial increase from the previous year. In low-income countries, the NEET rate for young men surged to 20.4%, highlighting the acute challenges faced by young people in these regions. The increase in NEET rates underscores the urgent need for targeted interventions to equip young people with the skills and opportunities they need to succeed in the rapidly evolving labour market. The failure to address this issue will have profound consequences for both individual well-being and long-term economic development.
The ILO report estimates the global jobs gap – the difference between the number of people who want to work and those who have a job – at a staggering 402 million in 2024. This figure encompasses the unemployed, those temporarily unavailable for work, and discouraged workers who have given up their job search. While the jobs gap has narrowed since the peak of the pandemic, it is projected to stabilize over the next two years, highlighting the persistent challenges in matching labour supply and demand. This persistent gap underscores the need for proactive policies to stimulate job creation and address the structural barriers that prevent people from accessing employment opportunities.
Despite the daunting challenges, the report also identifies promising areas for job growth, particularly in green energy and digital technologies. The renewable energy sector, driven by investments in solar and hydrogen power, has witnessed significant job creation, reaching 16.2 million jobs globally. However, the geographical distribution of these jobs is highly uneven, with East Asia accounting for nearly half of the total. This uneven distribution highlights the need for targeted policies to promote the development of green jobs in all regions and ensure a just transition to a sustainable economy. Digital technologies also hold significant potential for job creation, but many countries lack the necessary infrastructure and skills to fully capitalize on these opportunities. Bridging the digital divide and investing in skills development are crucial for ensuring that all countries can benefit from the transformative potential of digital technologies.
The ILO Director-General, Gilbert Houngbo, emphasizes the critical role of decent work and productive employment in achieving social justice and the Sustainable Development Goals. He calls for urgent action to address the multifaceted challenges facing labour markets and build a fairer, more sustainable future. The report recommends a multi-pronged approach to address these challenges, including boosting productivity through investments in skills, education, and infrastructure; expanding social protection systems to provide a safety net for vulnerable workers; and leveraging remittances and diaspora funds to support local development initiatives. These measures, implemented in a coordinated and comprehensive manner, can help mitigate the negative impacts of global economic headwinds, reduce inequality, and create a more inclusive and resilient labour market for all.
