Multiple global crises are causing a marked deterioration in the global labour market recovery, with increasing inequalities within and between countries, according to a new report from the International Labour Organisation.

The report, ILO Monitor on the World of Work, found that after significant gains during the last quarter of 2021, the number of hours worked globally dropped in the first quarter of 2022, to 3.8% below the pre-crisis benchmark (fourth quarter of 2019). This is equivalent to a deficit of 112 million full-time jobs.

This represents a significant downgrading of figures published by the ILO in January 2022.

Multiple new and interconnected global crises, including inflation (especially in energy and food prices), financial turbulence, potential debt distress, and global supply chain disruption, exacerbated by war in Ukraine, means there is a growing risk of a further deterioration in hours worked in 2022, as well as a broader impact on global labour markets in the months to come.

The Russian invasion against Ukraine is already affecting labour markets in Ukraine and beyond.

The report also finds that a great and growing divergence between richer and poorer economies continues to characterise the recovery. While high-income countries experienced a recovery in hours worked, low- and lower-middle-income economies suffered setbacks in the first quarter of the year with a 3.6 and 5.7% gap, respectively, when compared to the pre-crisis benchmark. These trends are likely to worsen in the second quarter of 2022, the ILO added.

More than two years after the start of the pandemic, many in the world of work are still suffering from the impact on labour markets. The report noted that labour incomes have not yet recovered for the majority of workers. In 2021, three in five workers lived in countries where labour incomes had not returned to the level seen in the fourth quarter of 2019.

The gender gap in hours worked also grew during the pandemic. In the first quarter of 2022, the global gender gap in hours worked was 0.7% greater than the pre-crisis benchmark (fourth quarter of 2019). Women in informal employment have been worst affected. And in terms of income groups, low and middle-income countries saw the largest increase of the gender gap.

The sharp rise in job vacancies in advanced economies at the end of 2021 and beginning of 2022 has led to a tightening of labour markets with a growing number of jobs available relative to job seekers. The ILO added, “But overall, there is no strong evidence that labour markets are generally overheated, given the considerable pool of unemployed and underutilised labour in many countries.”

LO Director-General Guy Ryder said, “The global labour market recovery has gone into reverse. An uneven and fragile recovery has been made more uncertain by a self-reinforcing combination of crises. The impact on workers and their families, especially in the developing world, will be devastating and could translate into social and political dislocation.”

The ILO calls for support to maintain the purchasing power of labour income and the overall living standards of workers and their families.

It also calls for assistance for hard-hit groups and sectors, particularly vulnerable workers and those making the transition from the informal to the formal economy. Furthermore, ILO’s report calls for ‘long-term, well-designed’ sectoral policies that promote the creation of decent and green jobs, support sustainability and inclusiveness, and assist enterprises, especially micro, small and medium-sized enterprises.

The ILO also adds in its report that it backs dialogue to support appropriate and fair wage adjustments including to minimum wages, strengthening of social protection systems and income support as well as careful adjustment of macroeconomic policies.