According to the recently published World Employment and Social Outlook: Trends 2025, the global economy is slowing down, which makes it more difficult for labor markets to completely recover.

According to the research, worldwide employment increased in 2024 in tandem with the labor force, maintaining the unemployment rate at 5%. Youth unemployment, however, did not significantly decrease, staying at 12.6%. Low-income nations had the greatest trouble establishing good employment, and working poverty and informal labor both returned to their pre-pandemic levels.

Recovery obstacles

The research highlights concerns that are straining labor markets, including unresolved debt difficulties, growing climate change costs, and geopolitical tensions. In 2024, economic growth was 3.2%, compared to 3.3% and 3.6% in 2023 and 2022, respectively. In 2025, growth is anticipated to be comparable, but over the medium run, a slowdown is anticipated.

The analysis concludes that even if inflation has dropped, it is still high, which lowers the value of earnings. Only a few advanced economies have seen a rise in real wages, while the majority of nations are still recuperating from the pandemic’s and inflation’s impacts.

Participation in the labor force is dropping, particularly among youth. The proportion of a nation’s working-age population that is employed or seeking employment is known as labor force participation. It serves as a gauge for the labor pool that is accessible to create products and services. According to the research, labor force participation rates have increased in high-income countries, mostly among women and older workers, while they have decreased in low-income ones. But there are still a lot of women in the workforce, which limits the advancement of living standards. The number of young men who are not in education, employment, or training (NEET) has drastically decreased. This trend is particularly noticeable in low-income nations, where young men’s NEET rates have increased by over 4 percentage points above the historical norm before the epidemic, making them more susceptible to financial difficulties. Low-income nations’ NEET (not in education, employment, or training) rates increased in 2024, with young men reaching 15.8 million (20.4%) and women reaching 28.2 million (37.0%), respectively, up 5,000 and 7,000 from 2023. In 2024, there were 173.3 million young women (28.2%) and 85.8 million young men (13.1%) who were NEET worldwide, an increase of 1.8 million and 1 million, respectively, from the year before.

The global employment gap widens

The expected number of individuals who want to work but do not already have a job, known as the global jobs gap, reached 402 million in 2024. This comprises 186 million jobless individuals, 137 million temporarily unable to work, and 79 million disillusioned workers who have given up on finding employment. The gap is anticipated to stabilize during the next two years, despite the fact that it has been steadily closing since the outbreak.

Fresh possibilities

The research finds that digital technology and renewable energy have the potential to create more jobs. Due to investments in solar and hydrogen power, the number of employment in renewable energy has increased to 16.2 million globally. However, the distribution of these positions is unequal, with about half headquartered in East Asia. According to the research, digital technologies provide possibilities as well, but many nations lack the necessary infrastructure and expertise to take full advantage of these developments.

Creative fixes

Gilbert F. Houngbo, the Director-General of the ILO, emphasized the urgent need for action. “Social justice and the Sustainable Development Goals cannot be achieved without decent labor and gainful employment. We must take immediate action to address labor market issues and build a more equitable and sustainable future in order to prevent worsening already fragile social cohesiveness, increasing climatic consequences, and mounting debt,” he said.

The study offers the following suggestions to solve today’s issues:

Increase productivity by funding infrastructure, education, and skill development to promote job creation and economic expansion.

Increase social protection: To lessen inequality, improve access to social security and safe working conditions.

Effective use of private money: Remittances and diaspora monies may be used by low-income nations to support local development.