Rosy unemployment rates mask a grim reality

Olivier De Schutter, United Nations Special Rapporteur on extreme poverty and human rights

Global unemployment is expected to fall below pre-pandemic levels in 2023 to 191 million (5.3% of the working population), according to the International Labour Organization (ILO).  

While welcome news, it doesn’t take long to grasp how little this means for the majority of the world’s workforce. 

As the ILO itself makes clear, recovery is being led by high-income countries, with low-income countries lagging far behind, worsening what the organization calls ‘the global employment divide’. Unemployment rates are particularly high in African and Arab countries where they sit stubbornly above pre-pandemic levels.  

And an improving employment picture in some parts of the world masks the global reality that having a job hardly guarantees a dignified life.  

The world of work is particularly perilous for the two billion people working in the informal economy – 60% of the world’s labour force – who are more likely to be in extremely low-paid, insecure jobs, with no contractual rights and often working in shockingly dangerous conditions. Although more prevalent in low-income countries, the rest of the world is not exempt: 18.6% of employment in the United States is considered informal.  

Guaranteeing decent jobs 

The world’s workers deserve decent jobs. And this is too important to be left to the market.  

Contrary to conventional wisdom, economic growth does not always lead to job creation, let alone provide the conditions for decent, fairly paid and meaningful jobs. In Africa, where growth is still largely based on the exploitation of natural resources, GDP increases have not always translated into more jobs. And automation in manufacturing and services – robotisation and, now, artificial intelligence – may, in fact, result in strong growth going hand in hand with job losses.  

Given the scale of the issue, this is not the time to be timid. In my latest report to the UN Human Rights Council I challenge governments to guarantee decent work to anyone willing and able to work. This is the idea of a ‘job guarantee’. 

The idea is not new. Many will be familiar with Roosevelt’s New Deal of the 1930s which employed millions in public works projects. More recently, India’s Mahatma Gandhi National Rural Employment Guarantee Act benefitted 76 million households in 2020/21. South Africa’s Presidential Employment Stimulus created nearly 800,000 jobs in 2021/22, mainly for young women.  

Here are examples of governments stepping in to ease the human, social and economic impact of unemployment and precarious work. Not sitting back and waiting for economic growth to create more jobs, as if by magic. 

These schemes can deliver fair wages, decent working conditions and they can create meaningful jobs that respond to local needs. Of the nearly 800,000 jobs created in South Africa, two thirds were in the basic education sector. 

And in high-income countries, where unemployment rates are down but long-term unemployment remains a stubborn pattern, a job guarantee can support this massively marginalised cohort back into decent work. 

France is experimenting with just that. With long-term unemployment at 1.5 million people in 2021, its Territoires zéro chômeur de longue durée (territories with zero long-term unemployment) project supports small towns to identify those permanently out of the labour market and create jobs for them that align with the town’s needs. Belgium is about to start a similar scheme. 

The job at hand 

Financing a job guarantee is not insignificant, though falling overall unemployment makes it both more affordable and easier to target at those who need it the most. The Indian scheme represented approximately 0.3% of India’s GDP in 2019-20. Spending on the Argentine Jefes y Jefas de Hogar scheme during the 2021-2 financial crisis accounted for 1% of GDP. Estimates for a job guarantee in the United States sit at 1.3% of GDP. 

This may seem costly, but the costs of inaction are far higher.  

Decent employment provides more than an income. It is a source of social inclusion, self-esteem and good mental and physical health. Unemployed people are around twice as likely to report psychological problems as those who are in work. Austria’s recent job guarantee pilot found statistically significant improvements in participants’ symptoms of anxiety and depression. Add to this the economic costs of unemployment, and the business case makes itself.  

Rosy unemployment rates should not fool us into thinking our job is done. Where unemployment still exists, where workers are exploited, poverty abounds. 

It’s time to get to work on the job guarantee.