Global Unemployment Steady, but Decent Work Progress Stalls, ILO Warns

The Employment and Social Trends 2026 report projects the global unemployment rate will hold at 4.9 per cent in 2026, equivalent to 186 million people.

 

Global unemployment is expected to remain stable, but progress toward decent work has stalled, leaving hundreds of millions of workers trapped in poverty, informality and exclusion, according to a new report from the International Labour Organization (ILO).

The Employment and Social Trends 2026 report projects the global unemployment rate will hold at 4.9 per cent in 2026, equivalent to 186 million people. However, the ILO cautions that stable headline figures mask deep and persistent problems in job quality, youth employment, and gender equality—risks now compounded by artificial intelligence and growing trade policy uncertainty.

“Resilient growth and stable unemployment figures should not distract us from the deeper reality,” said ILO Director-General Gilbert F. Houngbo. “Hundreds of millions of workers remain trapped in poverty, informality and exclusion.”

Job Quality Under Growing Pressure

The report finds that:

• Nearly 300 million workers still live in extreme poverty, earning less than US$3 a day

• Informal employment is rising, with 2.1 billion workers expected to be in informal jobs by 2026

• Progress has been especially weak in low-income countries, where workers with the poorest conditions are falling further behind

The ILO warns that slow structural transformation—away from low-productivity activities toward higher-value industries and services—is holding back job quality and productivity growth.

Youth Face Persistent Barriers, AI Adds New Risks

Young people remain among the most affected. Youth unemployment rose to 12.4 per cent in 2025, while around 260 million young people are not in education, employment or training (NEET). In low-income countries, NEET rates reach 27.9 per cent.

The report warns that artificial intelligence and automation could further disrupt labour markets, particularly for educated youth in high-income countries entering professional and technical occupations.

“While the full impact of AI on youth employment remains uncertain, its potential magnitude warrants close monitoring,” the report said.

Gender Gaps Remain Entrenched

Gender inequality in the labour market continues to persist. Women account for just two-fifths of global employment and are 24 per cent less likely than men to participate in the labour force. Gains in female labour force participation have stalled, slowing progress toward workplace gender equality.

Demographic Shifts Reshape Labour Markets

Demographic change is creating diverging pressures across regions:

• Ageing populations are slowing labour force growth in high-income countries

• Rapid population growth in low-income countries is not being matched by sufficient job creation

Employment growth in 2026 is projected at:

• 0.5% in upper middle-income countries

• 1.8% in lower middle-income countries

• 3.1% in low-income countries

Without productive jobs, poorer economies risk missing out on their demographic dividend, the ILO warned.

Trade Turbulence Adds Uncertainty

Trade remains a major source of employment, supporting 465 million jobs globally, more than half in Asia and the Pacific. However, trade disruptions, supply chain bottlenecks and policy uncertainty are cutting into wages—particularly in Southeast Asia, Southern Asia and Europe.

The report notes that:

• Digitally delivered services now account for 14.5 per cent of global exports

• Nearly half of all trade-related jobs are in market services

• Many African and South American countries remain heavily dependent on extra-regional markets for trade-related employment

Call for Coordinated Action

Houngbo stressed that without coordinated action, decent work deficits will deepen.

“Unless governments, employers and workers act together to harness technology responsibly and expand quality job opportunities for women and youth, decent work deficits will persist and social cohesion will be at risk,” he said.

Key Policy Recommendations

The ILO urges governments to:

• Invest in skills, education and infrastructure to boost productivity

• Address youth and gender gaps and manage technological change responsibly

• Strengthen the link between trade and decent work outcomes

• Mitigate risks from debt, AI and trade uncertainty through coordinated national and global policies

The report concludes that without stronger institutions and inclusive growth strategies, stable unemployment figures will continue to mask a global jobs crisis beneath the surface.

---

Tags: global employment, International Labour Organization, unemployment, decent work, youth employment, artificial intelligence, informal work, gender inequality, labour markets, global economy