Time to bridge the employment divide
G20 Summit

Time to bridge the employment divide

Narrowing inequalities requires multi-stakeholder cooperation, and G20 leaders can play their part by supporting key programmes designed to create millions of productive employment opportunities for those currently excluded

More than three years after the onset of the Covid-19 pandemic, many developing countries have yet to recover. While high-income countries have largely overcome the economic fallout, some of the poorest economies are struggling to deal with its impact and the multiple shocks and crises that have followed, such as crippling inflation and soaring energy costs. 

Globally, unemployment is likely to return to pre-pandemic levels in 2023. That is not the case for low-income countries, where unemployment remains higher than in 2019.

The growing employment divide is reflected in the global jobs gap, which measures the percentage of people who would like to work but do not have a job. 

This more comprehensive measure of the unmet demand for employment is projected to stand at 11.7% in 2023. That includes the 191 million people who are unemployed and an additional 262 million who want employment but are not classified as unemployed (such as people who are discouraged from seeking jobs or are unable to take up employment at short notice, such as people with care responsibilities). Overall, only a few countries, mostly high-income ones, experience relatively low jobs-gap rates. The rest of the world continues to face persistent employment deficits. 

Women are particularly affected. They face a jobs gap rate of 14.5%, compared to 9.8% for men. 

The employment divide is also seen between skills groups. High-skilled occupations, such as managers, technicians and professionals, have experienced a strong recovery. However, the jobs gap rate for low- and medium-skilled occupations, such as services and sales workers, remains below the level of 2019. 

Excluded and vulnerable

Although the level of social protection coverage varies by country and region, four groups consistently figure among the most excluded and vulnerable: workers in the informal economy; migrant workers, including those who have been forcibly displaced; young people; and women. 

Most workers in the informal economy fall into what has been called the ‘missing middle’. They neither have access to contributory schemes, nor are they included in narrowly targeted social assistance schemes. Yet all the evidence shows that investing in social protection and the institutions of work will bring broader economic, employment and social benefits. 

Moreover, digitalisation, decarbonisation and demographic change are transforming the world of work. Urgent action is needed to equip workers with the necessary skills and protections to benefit from these transformations. If not, barriers to the labour market will grow and talents will be wasted, and that will hold back economic growth and productivity. 

Prioritise investment 

For lower-skilled youth, older workers, people with disabilities, and women entering the workforce or returning after absences due to caring responsibilities, their skilling, reskilling and upskilling are vital if we are to create equitable and inclusive workplaces. This requires higher levels of investment in productive employment and people’s capabilities. 

Moreover, fair wages, good working conditions, equality, non-discrimination, and improved safety and health at work would increase labour market participation, particularly for women. 

In many developing countries, rising debt levels and constrained fiscal space add to the challenges, considerably narrowing the window for policy interventions. Investment at the international level in creating decent work in low-income countries would accelerate economic and social development and ensure a just transition to greener economies. This is a matter of urgency, particularly at a time when reform of the international financial architecture has been the focus of global discussions. 

The aspiration for social justice remains elusive for far too many. Therefore, the International Labour Organization is calling for a Global Coalition for Social Justice that will strengthen the ability of countries to succeed in narrowing inequalities. Advancing social justice and the social dimension of sustainable development through intensified multilateral and multi-stakeholder cooperation could renew the impetus for measures that will turn the tide on poverty and inequality. 

G20 leaders can contribute to the Global Coalition by supporting the Global Accelerator on Jobs and Social Protection for Just Transitions. This means working together to increase investments within national financing frameworks to help create at least 400 million productive employment opportunities, primarily in the green, digital and care economies, and to extend social protection coverage to the over 4 billion people who are currently excluded.