Unemployment has not found a new business – Newspaper Kommersant No. 7 (7452) dated 17.01.

In 2023, according to the forecast of the International Labor Organization (ILO), the unemployment rate in the world will remain unchanged, although in absolute terms the number of unemployed will increase by 3 million people, to 208 million. The maximum risk of losing a job will be for residents of high-income countries, for women and for young workers.

In 2023, the global labor market may react to a slowdown in economic growth in an atypical way: thanks to high inflation, companies will be able to reduce real wage bills by laying off a small number of workers. This is the conclusion reached by ILO analysts, who yesterday presented the report “Prospects for employment and social protection in the world: trends in 2023”.

As follows from this document, this year the number of unemployed in the world will begin to grow again, increasing by 3 million people, to 208 million, and in 2024 to 210.9 million. The unemployment rate will remain unchanged in 2023, and in 2024 will not exceed 5.8%, that is, the level of 2022. However, it is still ahead of the pre-pandemic value (5.5%, or 191.9 million people). High-income countries will experience the largest increase in the unemployment rate – from 4.5% to 4.9%, for other categories of countries this figure will decrease (by 0.1 percentage points in low- and lower-middle-income countries, for countries with incomes above the average level – by 0.2 p.p.). For women, the probability of being unemployed this year, as in 2022, will be slightly higher than for men (5.8% versus 5.7%, respectively). For youth, the risks of unemployment are almost three times those for adults, which is in line with the projected 14% youth unemployment rate in 2023.

According to ILO analysts, the main reason for the rise in unemployment, which has been declining for two years in a row after a surge in 2020 due to the global coronavirus pandemic, was the slowdown in the global economy. Thus, according to the forecast of the International Monetary Fund (IMF), in 2023 it will be only 2.7% against the annual average of 3.6% from 2000 to 2021. A significant slowdown in the growth of the three largest economies in the world – China, the European Union and the United States – is one of the main factors in the global recession. At the same time, ILO analysts note that the projected increase in unemployment can be considered moderate if, for example, it is compared with job losses during the pandemic. Two factors will restrain the growth of the number of unemployed: high inflation, which allows companies to reduce the real costs of companies on wages (in 2022, the growth of wages in the world for the first time in the last 20 years could not outrun inflation and decreased by 0.9% in annual comparison; see Fig. “Kommersant” dated December 2, 2022), and a shortage of workers due to the aging of the population. According to the ILO report, it is already being experienced by employers in developed countries who are forced to retain workers even if they need to optimize costs.

It should be noted that such a reaction of the global labor market in many respects may turn out to be similar to the Russian “anti-crisis” model, in which the unemployment rate has shown relatively low dynamics for years even in significant economic crises. In this case, the replacement for layoffs of workers was the reduction of the variable part of salaries, transfer to part-time work and underpayment of vacations. In 2022, against the backdrop of a 2.9% fall in Russia’s GDP, the unemployment rate in the country fell from 4.4% to a historic low of 3.7%. However, as Kommersant previously wrote (see the issue of June 5, 2020), although in this situation the incomes of workers are declining, they remain connected to the labor market and lose their labor skills to a lesser extent.

Anastasia Manuylova