Geopolitical tensions, climate costs strain global labour markets
Geopolitical tensions, climate costs strain global labour markets

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Geopolitical tensions, the rising costs of climate change, and unresolved debt issues are putting labour markets under pressure, according to the International Labour Organization’s World Employment and Social Outlook: Trends 2025.
The report says the global economy is slowing, hindering full labour market recovery.
In 2024, global employment grew in line with the labour force, keeping the unemployment rate steady at 5%, the report says. However, youth unemployment showed little improvement, remaining high at 12.6%. Informal work and working poverty returned to pre-pandemic levels, and low-income countries faced the most difficulties in creating decent jobs.
The report points to challenges such as geopolitical tensions, the rising costs of climate change and unresolved debt issues.
Economic growth stood at 3.2% in 2024, down from 3.3% and 3.6% in 2023 and 2022, respectively. A similar level of growth is expected in 2025, although a gradual deceleration is expected to set in over the medium term.
At the same time, although inflation has decreased, it remains high, reducing the value of wages, the report finds. Real wages have only increased in some advanced economies, and most countries are still recovering from the effects of the pandemic and inflation.
Meanwhile, the global jobs gap, defined as the estimated number of people who want to work but do not have a job, reached 402 million in 2024. This includes 186 million unemployed people, 137 million who are temporarily unavailable to work, and 79 million discouraged workers who have stopped looking for jobs. While the gap has been gradually narrowing since the pandemic it is expected to stabilise over the next two years.
ILO’s report also found that the labour force participation rates have dropped in low-income countries while increasing in high-income nations, mainly among older workers and women. However, gender gaps remain wide, with fewer women in the workforce, limiting progress in living standards. Among young men, participation has fallen sharply, with many not in education, employment or training (NEET). This trend is especially pronounced in low-income countries, where NEET rates for young men have risen by nearly 4% above the pre-pandemic historical average, leaving them vulnerable to economic challenges.
NEET rates in low-income countries rose in 2024, with young men reaching 15.8 million (20.4%) and young women 28.2 million (37.0%), marking increases of 500,000 and 700,000 respectively from 2023. Globally, 85.8 million young men (13.1%) and 173.3 million young women (28.2%) were NEET in 2024, up by 1 million and 1.8 million respectively from the previous year.
The report makes some recommendations to address current challenges:
- Boost productivity: invest in skills training, education and infrastructure to support economic growth and job creation.
- Expand social protection: provide better access to social security and safe working conditions to reduce inequality.
- Use private funds effectively: low-income countries can harness remittances and diaspora funds to support local development. Diaspora refers to the dispersion or spread of a people from their original homeland.
ILO’s study also identifies potential for job growth in green energy and digital technologies. Renewable energy jobs have grown to 16.2 million worldwide, driven by investment in solar and hydrogen power. However, these jobs are unevenly distributed, with nearly half based in East Asia.