World Employment and Social Outlook 2022 - Key Highlights & Analysis | Testbook.com

What Does the World Employment and Social Outlook Report Focus On?

The report by the ILO aims to:

• Provide a comprehensive picture of global employment and social trends.
• Use the unemployment rate as a measure of the labour market's underperformance.
• Assess the full potential of the working-age population.
• Evaluate the contribution of the labour market to the economic growth of countries.

Major Highlights of the World Employment And Social Outlook Report 2022

The 2022 report provides a comprehensive analysis of the global labour market recovery in response to various national pandemic measures. It evaluates global trends, regional variations, and consequences across industries and worker categories. The report also includes projections for the anticipated revival of the labour market.

The report warns that the outlook remains uncertain due to the unpredictable nature of the pandemic. Detailed labour market estimates for 2022 and 2023 are provided in the WESO Trends report. Here are the key highlights of the report:

1. Global Labour Force Participation:

• The report estimates that around 40 million people will withdraw from the global labour force in 2022.

2. Global Working Hours:

• Global working hours in 2022 will be approximately 2% less than pre-pandemic levels, equating to a loss of 52 million full-time jobs.
• This gap is twice as large as the ILO's 2021 prediction.

3. Unemployment:

• The global unemployment rate is expected to remain above pre-Covid-19 levels until at least 2023.
• The unemployment level is expected to rise to 207 million in 2022, up from 186 million in 2019.

4. Poverty:

• The pandemic has pushed many children into poverty.
• An additional 30 million adults are expected to live in extreme poverty (defined as living on less than $1.90 per day in purchasing power parity) in 2020 due to unemployment.
• Eight million more people are now classified as extreme working poor, meaning their earnings from work are insufficient to lift them and their families out of poverty.

5. Impact on Different Sectors:

• Some sectors, such as travel and tourism, have been particularly affected, while others, such as information technology, have thrived.

6. Impact on Young Population and Women:

• The labour market crisis has disproportionately affected women, a trend that is expected to continue.
• The long-term impact on young people will be felt due to the closure of educational and training facilities, especially for those without internet access.

7. Clearly Distinctive Effects:

• The report warns that the crisis is eroding the economic, financial, and social fabric of almost every country, regardless of its level of development. There are significant differences in the impact on different worker groups and countries.
• The damage will likely take years to repair, and may have long-term effects on labour markets, household incomes, and social and potentially political cohesion.

8. Regional Variations:

• The effects have been particularly severe for developing countries, which already had weaker social security systems, higher levels of inequality, and divergent working conditions.
• The lack of vaccine availability in many low and middle-income countries, coupled with limited options for increasing government spending to address the situation, exacerbates the problem.

9. Recovery Predicted:

• The report emphasizes that a broad-based labour market recovery is essential for a genuine recovery from this pandemic.
• Principles of decent work, such as health and safety, equity, social protection, and social dialogue, must underpin any sustained recovery.
• For a country like India, where the majority of work is performed informally, the new labour market forecast can be crucial for policy planning to prevent future job losses and reductions in working hours.

Conclusion:

A broad-based labour market recovery is essential; this recovery must be human-centred, inclusive, durable, and resilient. The principles of decent work, such as health and safety, equity, social protection, and social dialogue, must form the basis for this recovery.

For more insights, read about Unemployment in India in the linked article.

Related Links

Key Takeaways from the 2021 World Employment and Social Outlook

The annual report offers a synopsis of the performance of the labour market across the globe. Here are some key findings:

1. Digital Labour Platforms
   • There was a fivefold increase in the numbers of digital labour platforms between 2010-2020.
   • The majority of these platforms are concentrated in a few countries, including the USA, India, UK, and Ireland.
2. The supply of labour on digital labour platforms exceeds demand.
   • The COVID-19 pandemic has resulted in an increase in the labour supply on these platforms.
   • Demand has decreased, particularly in the areas of software development and technology.
   • The outcome of this increased demand is seen in the downward pressure on earnings.
3. The distribution of investment in digital labour platforms varies. Asia, North America, and Europe account for the largest concentration of investments (96 percent).
   • Asia – 56 US Billion Dollar
   • North America – 46 US Billion Dollar
   • Europe – 12 US Billion Dollar
4. In 2019, digital labour platforms generated total revenue worth 52 US Billion Dollars, with 70 percent concentrated in only two countries:
   • The US – 49 percent
   • China – 22 percent
5. Four Key Elements of the business strategies adopted by the digital labour platforms:
   • Revenue Strategy – Subscription plans, multiple fees to platform workers, clients, users etc.
   • Recruitment and matching of workers with clients – Algorithms over human interaction. Ratings, Clients or customers’ reviews, cancellation rate, work acceptance and profile of workers are bring used through algorithms.
   • Work Processes and Performance Management – Using algorithms, the entire process of work and performance of workers is being managed.
   • Rules of platform governance – The digital platforms govern the platform workers, clients, users based on their terms of service agreements.
6. The reliance on digital labour platforms is increasing
   • Both start-ups and Fortune 500 companies are increasingly relying on digital labour platforms.
7. Location-based platforms have aided various businesses, including Small and Medium Enterprises (SMEs).
8. The number of men working on digital labour platforms exceeds the number of women. As per ILO surveys of workers on online web-based and location-based (taxi and delivery) platforms; women represent only four in ten workers on online web-based platforms and one in ten workers on location-based platforms.
9. Challenges to Businesses:
   • Managing work arrangements
   • Risk of losing internal human resource capacity
   • High commission fees
   • Poor digital infrastructure
   • Traditional businesses, particularly in the retail sector, face a setback due to competition from large e-commerce companies. Other challenges faced by traditional businesses include:
     • Unfavourable contractual terms
     • Lack of transparency on the part of platforms (especially with regard to data, rankings, and pricing)
     • Weak dispute resolution mechanisms
     • Uneven playing field
10. There is a significant disparity in income from digital labour platforms between developed and developing countries:
    • Half of the platform workers on online web-based platforms earn less than the average hourly earning in a week.
    • Freelance platform workers in developing countries earn 60 percent less than those in developed countries.
11. Earnings from the app-based taxi and delivery sector businesses on online web-based platforms are higher in developing countries.
12. Online platform workers often lack social security coverage.
13. The classification of occupations found on online web-based platforms are:
    • Software development and technology
    • Creative and multimedia
    • Writing and translation
    • Clerical and data entry
    • Sales and marketing support
    • Professional services

India's Position in the WESO 2021 Report

1. India is the largest supplier of labour globally.
2. There has been a significant increase in the number of digital labour platforms in India.
3. The supply of online labour has increased.
   • India saw an 8 percent increase in its online labour supply from 2018 to 2020.
   • The increase in online labour supply was seen in the areas of software development & technology, and creative and multimedia services.
4. The major setback is the women’s share of labour supply in the online web-based platforms. It is the lowest in India; at 21 percent. All major occupation services see the least share of women from India. The percentage of men and women labour supply between October 2020 and January 2021 in different occupations online is given below:
   • Clerical and Data Entry
     • Men – 80 percent
     • Women – 20 percent
   • Creative and Multimedia
     • Men – 79 percent
     • Women – 21 percent
   • Professional Services
     • Men – 68 percent
     • Women – 32 percent
   • Sales and Marketing
     • Men – 81 percent
     • Women – 19 percent
   • Software and Technology
     • Men – 84 percent
     • Women – 16 percent
   • Writing and Translation
     • Men – 53 percent
     • Women – 47 percent
5. Impact of COVID on India’s online labour supply:
   • India experienced an increase in both online labour supply and demand.
   • The demand for online labour supply came from occupational services like clerical and data entry, professional services, along with software development and technology.
   • The number of registered workers increased across all occupations except in professional services.

Insights from the World Employment and Social Outlook Trend 2020

The four key messages that the report highlighted:

1. Low-income countries face challenges in improving poverty and working conditions due to lower economic growth and lack of inclusive growth.
2. Significant gaps in access to work are highlighted with the rate of total labour underutilization.
3. Inadequacies in work quality, especially in the informal sector.
4. Substantial inequalities in access to work and work quality among workers based on their geographical locations, sex and age.

Also read | Income Inequality in India

The WESO report mentions its findings in multiple aspects, a few of the important ones mentioned below:

1. Rise in discontent with social, political, and economic situations – 7 out 11 subregions of the world saw an increase in the incidents of protests in 2019.
2. Challenges to low-income countries ;
   • Gap between lower-income and middle-income countries has widened with a supporting fact that in 2018, the average GDP per capita across lower-income countries was 1700 US dollars.
   • Also, the report mentioned that for the past 18 years, only 1.8 percent growth in average per capita has been witnessed in low income countries
3. Way forward for low-income countries to boost their economic growth
   • Structural transformation
   • Technological upgrade
   • Technological diversification
4. 470 million people worldwide affected due to total labour underutilization:
   • 188 million people were reported to be unemployed in 2019.
   • 165 million people who are employed stated a wish to work for more paid hours.
   • 120 million people were not classified as unemployed but are marginally attached to the labour market. (Such people are those who are not looking for a job while being available for work; or searching for a job but not getting one.)
5. Way forward to come out of labour underutilization:
   • Comprehensive policies regarding labour reforms
   • Labour underutilization to be measured comprehensively along with the unemployment rate.
6. Shortage of jobs in the near future
   • The global unemployment rate was reported to be 5.4 percent in 2019.
   • The report stated that the global unemployment rate will be near 5.4 percent only in 2020 and 2021 with no significant improvement.
   • Decline of the unemployment rate has come to a halt due to economic slowdown (especially in the manufacturing sector); technological changes (which lead to mass job losses).
   • High-income countries fare better than middle-income countries w.r.t unemployment
7. Paid job does not guarantee decent working conditions
   • People who are employed in the informal sector are paid little with no access to social protection and rights at work
   • 2 billion people are informally employed and make 61 percent of the global workforce
8. Workers living under the poverty
   • Over 630 million workers across the globe (19 percent of employed workers) are living in extreme or moderate poverty.
   • The target goal of sustainable development goals (SDGs) to eradicate poverty by 2030 is difficult to attain given workers’ poor conditions.
9. Inequalities in the labour market
   • Highest employment-population ratio is found in low-income countries.
   • Africa has the highest unemployment rate (12%)
   • The employment rate (59%) is higher in rural areas than in urban areas (56%); however, rural areas witness more time-related underemployment.
   • On the account of technological innovations, there seems to be the increase in rural-urban disparities.
   • Migration leads to disparities as the migrants don’t seem to access similar rights as the original inhabitants of the area where they migrate to. Geographical disparities in labour markets lead to more migration and subsequent inequality rise.
10. Women and youth participation in the labour market
    • In 2019, women labour force participation remained 27 percentage points below the male participation rate. Women participation in the labour force stood at 47 percent in comparison to 74 percent participation rate of male participation.
    • Gender stereotyping remains a prevalent issue for lesser female participation in the labour market.
    • 22 percent of the people in the age brackets of 15-24 are not in employment worldwide.

Current Employment Scenario in India

According to the Ministry of Labour and Employment's annual report 2021-22, here are a few significant facts about the employment status in India:

• India has 149.8 million women workers. Of these, 121.8 million are in rural areas and 28.0 million are in urban areas.
• Of the total 149.8 million female workers, 35.9 million females work as cultivators and another 61.5 million are agricultural labourers.
• The remaining female workers, 8.5 million are in household industries and 43.7 million are classified as other workers.
• As per Census 2011, the work participation rate for women is 25.51 per cent as compared to 25.63 per cent in 2001.
• As per the results of Periodic Labour Force Survey (PLFS) conducted by National Statistics Office, Ministry of Statistics and Programme Implementation during 2019-20, the Worker population Ratio (WPR) (in percent) for women in the age group 15 years & above according to usual status (principal status +subsidiary status) was 28.7% at all India level and it was 32.2% rural areas as compared to 21.3% in urban areas.
• Data from the Centre for Monitoring Indian Economy (CMIE) shows that India’s Labour Force Participation Rate (LFPR) has fallen to just 40% from an already low 47% in 2016.
• According to the National Statistical Office (NSO), the unemployment rate for people in urban areas of India who are 15 years of age and over dropped from 12.6% in April to June 2021 to 7.6% in April to June 2022.

‘World Employment and Social Outlook’ is one of the important reports published by international organizations . Aspirants can use the findings of the report to support their answers in UPSC GS papers.

Related Links: