A stark warning on the state of global employment was issued in the form of the International Labour Organization’s (ILO) recent release on September 4th, of its World Employment and Social Outlook.
The report reveals a troubling trend of increasing inequality, as the share of national income going to workers remains stagnant. This is compounded by a youth employment crisis, with a significant proportion of young people struggling to find decent work due to unemployment, educational barriers, or lack of training and preparation for the modern job market.
The ILO’s findings highlight the urgent need for governments and policymakers to address these pressing issues and work towards creating a more equitable and supportive employment landscape for all.
With the 2030 deadline looming, a new report from the ILO sounds the alarm on slow progress towards achieving the United Nations’ Sustainable Development Goals (SDGs).
The report is indicative of slow progress on the key Sustainable Development Goals (SDGs) which have the deadline approaching 2030. As per one of the major reasons for this fall in labour income, is artificial intelligence.
A comprehensive analysis spanning two decades, and 36 countries reveals a troubling trend, while technological innovations have driven significant gains in labour productivity and output, they have also led to a decline in the share of income going to workers. Thereby concentrating economic benefits in the hands of capital owners. If left unchecked, this trend could lead to further erosion of labour’s share of income, exacerbating income inequality and social unrest.
Therefore, a robust policy response is urgently needed to mitigate the negative consequences of technological change and ensure that the benefits of innovation are shared more equitably among all stakeholders. Without swift action, the future of work looks increasingly precarious for workers worldwide.
Furthermore, the study demonstrates that the global labour income share – the percentage of total income earned by workers – has plummeted to a historic low. Between 2019 and 2022, the share dropped by 0.6 percentage points, and has since stagnated, continuing a decades-long decline. If the share had remained at the same level as in 2004, labour income would by US $2.4 trillion in 2024 alone.
The COVID-19 pandemic has been identified as a major catalyst for the sharp decline in the global labour income share, with a staggering 40% of the decrease occurring between 2020-2022. The crisis has exacerbated existing social and economic inequalities, disproportionately affecting vulnerable populations.
As capital income continues to accumulate among the wealthiest individuals, the pandemic has further undermined efforts to achieve Sustainable Development Goal 10 (SDG 10), which seeks to reduce inequality both within and between countries. The widening gap between the rich and the poor poses a significant threat to social cohesion, economic growth, and global progress towards a more equitable future.
Technological advances, including automation, have played a role in this trend. While these innovations have boosted productivity and output the evidence suggests that workers are not sharing equitably from the resulting gains.
Therefore, it emphasizes the urgent need for comprehensive policies to ensure that the gains from technological innovation are equitably distributed, promoting inclusive growth and social cohesion. Without such measures, the AI revolution risks widening the gap between the rich and the poor, jeopardizing the achievement of the SDGs and a more sustainable future for all.
Celeste Drake, ILO Deputy Director-General, said: “Countries must take action to counter the risk of declining labour income share. We need policies that promote an equitable distribution of economic benefits, including achieve inclusive growth, and build a path to sustainable development for all.”