ILO estimates there will be a working-hour deficit equivalent to 52 million full-time jobs owing to the crisis-induced labour market disruptions in 2022.
In its recent ‘World Employment and Social Outlook Trends 2022’ the UN agency noted a return to pre-pandemic performance is likely to remain elusive for much of the world over the coming years.
On the basis of the latest economic growth forecasts, the ILO projects that total hours worked globally in 2022 will remain almost 2 per cent below their pre-pandemic level when adjusted for population growth, corresponding to a deficit of 52 million full-time equivalent jobs (assuming a 48-hour working week). Global unemployment is projected to stand at 207 million in 2022, surpassing its 2019 level by some 21 million.
This outlook represents a substantial deterioration since the projections made in the previous edition of World Employment and Social Outlook: Trends published in June 2021, when the shortfall in working hours relative to the fourth quarter of 2019 was projected to narrow to less than 1 per cent in 2022. Recovery patterns vary significantly across regions, countries and sectors.
Since the onset of the recovery, employment growth trends in low- and middle-income countries have remained significantly below those observed in richer economies, owing largely to the lower vaccination rates and tighter fiscal space in developing countries. The impact has been particularly serious for developing nations that experienced higher levels of inequality, more divergent working conditions and weaker social protection systems even before the pandemic.
The Covid-19 pandemic dominated the global economy for a second year in 2021, preventing a full and balanced recovery of labour markets. The pace at which economic activity has recovered has depended largely on the extent to which the virus has been contained, such that the recovery is following different patterns across geographies and sectors.
However, every new outbreak brings setbacks. Many gains in decent work made before the pandemic have been significantly impacted upon, and pre-existing decent work deficits are dampening the prospects of a sustainable recovery in many regions.
The report also notes that key labour market indicators in all regions – Africa, the Americas, the Arab States, Asia and the Pacific, and Europe and Central Asia – have yet to return to pre-pandemic levels. For all regions, projections to 2023 suggest that a full recovery will remain elusive.
The European and Pacific regions are projected to come closest to that goal, whereas the outlook is the most negative for Latin America and the Caribbean and for South East Asia. All regions face severe downside risks to their labour market recovery that stem from the ongoing impact of the pandemic.
The pandemic is structurally altering labour markets in such ways that a return to pre-crisis baselines may well be insufficient to make up for the damage caused by the pandemic.
Underlying structural deficiencies and inequalities are amplifying and prolonging the adverse impact of the crisis. The large informal economy in many developing countries is impairing the efficacy of some policy instruments, since informal enterprises have been less able to access formal lines of credit or Covid-19-related government support.
Thus relief measures have been less likely to reach those in need, and inequities within countries have worsened. Smaller businesses have experienced greater declines in employment and working hours than have larger ones.