Worldwide Labor Market Trends

Worldwide Labor Market Trends

Political and social events throughout the world are felt directly by those working in the field of recruiting. The International Labor Organization’s 2017 trends outlook points to two major conclusions.

  • There is a disconnect between economic growth and the growth of good employment opportunities. Two of their principle economists believe that the situation is likely to worsen.
  • Global unemployment is expected to rise by as much as 3.4 million per year.

The worst pockets of unemployment increase will be in the Southern African nations of South Africa, Namibia, Mozambique, and Botswana. Gabon and Sudan will experience sharp unemployment rises as well. Unemployment in the southern Arabian peninsula, in Yemen and Oman, will also be high. Iraq will suffer big unemployment increases. Spain is another country expected to show big rises in unemployment.

Unemployment Rate Variation

In general, unemployment in the emerging and developing economies will increase only slightly. Those countries have shown a low and steady level of unemployment over the last 10 years. Unemployment in the European Union hit a peak of nearly 11 percent in 2013 and has begun to show a slow decline. Other developed economies reached an average high unemployment rate of a little over 8 percent in 2009 and are now slowly recovering to under 6.5 percent unemployment. The world unemployment rate has gradually dropped to an average of about 8.5 percent.

The demand for unskilled workers has been declining for years in the European Union and the United States. In the United States, the effect of low demand for unskilled workers has largely affected wages. In the European Union, it has affected the high rate of unemployment. Different countries also offer widely divergent unemployment benefits. The European Union tends to offer the most generous unemployment arrangements, which is correlated with higher unemployment numbers.

Of course, these figures are subject to big errors because of the variations in the way unemployment is measured. China measures unemployment through a registered database. Their calculations do not include workers who are not registered. European and U.S. statistics do not include laid-off workers, but these workers do add into Chinese statistics.

Disruptive Change

The World Economic Forum’s discussions reveal wide differences of opinion about the effect of big technological change on employment. Some leaders warn of massive labor displacements, others foresee endless economic opportunity. All call for change in the educational system to produce a workforce with “future-proof skill.”

  • The consensus is that artificial intelligence will have a negative impact on employment, but that the effects will not be catastrophic, at least not for the next few years.
  • Leaders are feeling that the biggest drivers of unemployment will be demographic and socio-economic in nature. As the wave of older populations passes, younger populations will generate new markets.
  • The increasing economic independence of women, especially in emerging economies, will generate new economic activity.
  • On the other hand, the discussions revealed increased concern about political volatility in the world. This anti-establishment fervor could undermine job creation on a global level.
  • Geopolitical disruption can have a particular effect on supply chains.

Leaders expect an overall decline in traditional manufacturing and production employment because of technologies that substitute for labor. Additive manufacturing including 3-D printing and much more use of sustainable products can reduce the need for factory production. At the same time, some leaders point to the possibility that new technologies can be more labor-complementary than job replacing.

Some fields like architecture, engineering, and technology will be nourished by the fast-growing need to create and manage advanced automated production systems. High-skilled engineers will be in growing demand to make the Internet of Things a reality.

Transition

Clearly, the world economic order and the future of employment are in transition. Predictions are mixed and ambivalent about the future. The potential for new prosperity is there, but so is the potential for the employment economy to grow less inclusive. Looking to experts to tell the future yields a very mixed picture.

The Network Editorial Team