Canada’s labour market put in a resilient performance last year – an anomaly compared with most other countries.
Global unemployment grew by another 4 million people over the course of last year amid weaker economic activity and lingering uncertainty about hiring, the International Labour Organization said in its annual study of global employment trends.
Its report highlights a number of shifts in the world of work. Labour participation rates are ebbing as more workers get discouraged. The mismatch between people without jobs and jobs without people is getting more acute. And youth are once again hardest hit.
“In the fifth year after the outbreak of the global financial crisis, global growth has decelerated and unemployment has started to increase again,” the Geneva-based United Nations agency said in its 239-page analysis.
Labour market mismatches are getting worse. “The length and depth of the labour market crisis is worsening labour market mismatch, contributing to extended spells of unemployment.”
Jobs in exporting industries are “particularly vulnerable” as trade weakened in some parts of the world. As a result, “new jobs that become available often require competences that the unemployed do not possess.”
These skills mismatches will make the labour market more slow to respond if economic activity does ramp up unless there are more policies to promote skills training, it cautioned.
All told, unemployment has swelled by 28 million people since the start of the financial crisis, with half of that increase in advanced economies. And the slowdown in those economies is causing “significant spillovers” into the labour markets of developing economies too.
About 197 million people were jobless around the world last year. And about 40 million dropped out of the labour market “as job prospects proved unattainable” – particularly in Europe.
The agency expects the unemployment rate will rise again this year and next, with the number of unemployed people hitting 210.6 million in the next five years.
Even regions that haven’t seen spikes in unemployment “often have experienced a worsening in job quality, as vulnerable employment and the number of workers living below or very near the poverty line increased.”
Conditions for young people aren’t likely to improve in the near term. About 73.8 million of them are unemployed globally and by next year that will grow by another half a million. More than a third of young people without jobs have been without work for half a year or longer and a growing number are getting discouraged and leaving the labour market.
The economic slowdown “has dramatically diminished the labour market prospects for young people, as many experience long-term unemployment right from the start of their labour market entry, a situation that was never observed during earlier cyclical downturns.”
Income growth is sluggish, with downward pressure on real wages through much of the industrialized world, which will hold back consumption, the ILO said.
Some areas are improving. The rate of working poverty is still decreasing, albeit at a lower pace than before the downturn. Some countries “have seen the emergence of a working middle class, which has now surpassed 40 per cent of the developing world’s workforce.”
The report offers several recommendations, among them easing policy uncertainty to give employers more confidence to hire; boosting job counseling; tackling mismatches by increasing skills and job retraining programs, and – controversially, given the strain of many government’s finances – introducing short-term stimulus measures in some countries.