The International Labour Organization’s (ILO) 2025 report, World Employment and Social Outlook: Trends 2025, reveals mounting challenges for labour markets worldwide. Released in Geneva, the report highlights that global economic growth slowed to 3.2% in 2024, marking a significant slowdown that has affected the global labour market recovery.
Despite steady unemployment rates at 5% globally, youth unemployment remains a pressing issue at 12.6%. Informal work and working poverty levels have returned to pre-pandemic norms, with low-income countries particularly impacted. Labour force participation among younger populations has dropped significantly, with many young people now categorized as NEET (not in education, employment, or training).
In low-income nations, NEET rates for young men surged by 4 percentage points above historical averages. The situation is even more severe for young women, with 37% classified as NEET compared to just 13.1% for young men globally. These figures underscore the persistent inequalities in job opportunities and education access between genders and income groups, posing challenges to sustainable economic growth.
Economic Strains on Labour Markets
The report attributes the slowed global labour market recovery to geopolitical tensions, escalating climate-related costs, and unresolved debt issues. These factors have hindered economic growth, with projections indicating continued stagnation into 2025. Although inflation has eased, it continues to erode wage value, leaving many economies struggling to recover fully from pandemic-era shocks.
The global jobs gap reached 402 million in 2024, including 186 million unemployed individuals and 79 million discouraged workers. This figure reflects the structural issues compounded by post-pandemic economic slowdowns. Gender disparities in the workforce remain stark, with fewer women participating in labour markets. Such inequality hinders progress in living standards and highlights the need for targeted interventions to address the global labour market recovery.
While challenges dominate, the report highlights promising opportunities in green energy and digital technologies. Renewable energy jobs have grown to 16.2 million globally, driven by investments in solar and hydrogen power. However, these opportunities remain unevenly distributed, with East Asia accounting for nearly half of all green energy jobs.
Similarly, digital technologies present significant potential but require improved infrastructure and enhanced workforce skills in many regions. Bridging this gap could unlock substantial economic and employment benefits, offering a viable path to resilience and growth in vulnerable economies.
Call to Action
ILO Director-General Gilbert F. Houngbo emphasized the importance of immediate action: “Decent work and productive employment are essential for achieving social justice and the Sustainable Development Goals. To avoid exacerbating already strained social cohesion, escalating climate impacts, and surging debt, we must act now to tackle labour market challenges and create a fairer, more sustainable future.”
The report outlines several strategies to address these challenges. Boosting productivity through investments in education, skills training, and infrastructure is a key priority. These measures can drive economic growth and foster meaningful job opportunities.
Expanding social protection is another vital step. Enhancing access to social security and ensuring safe working environments can reduce inequality and improve living standards, particularly in low-income nations.
Leveraging private funds offers an innovative solution for development. Low-income countries can harness remittances and diaspora investments to support local growth and infrastructure, paving the way for a sustainable global labour market recovery.
As global labour markets face mounting pressures, the ILO’s report serves as a clarion call for governments and stakeholders to invest in sustainable solutions. By addressing inequalities and embracing opportunities in green and digital sectors, the global community can pave the way for a more equitable and resilient future.
This comprehensive approach aligns with the ILO’s vision for achieving social justice and sustainable development, ensuring labour markets can withstand current and future challenges.