The World Labor Market Faces Threats to Jobs as International Economic Disruptions Worsen, According to ILO Warning

The International Labour Organization's Director-General, Gilbert Houngbo, has sounded the alarm on an impending labour crisis fueled by relentless global shocks, despite the appearance of stability in global labour markets, with steady unemployment and continued growth expected into early 2026.

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According to Houngbo, underlying structural weaknesses, including widespread informality and extreme poverty, pose a significant threat to millions of workers, undermining social cohesion and economic resilience in the process.

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In his address to the International Monetary Fund and World Bank Spring Meetings in Washington, D.C., Houngbo highlighted the persistent deficits in decent work, emphasizing that the core challenge lies in the quality of work and structural transformation.

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He noted that a staggering 284 million workers remain trapped in extreme poverty, while 2.1 billion workers, accounting for nearly 58 per cent of the global workforce, are engaged in informal employment.

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Houngbo further warned that rising sovereign debt, limited fiscal space, and elevated economic uncertainty are constraining governments' ability to support workers and strengthen labour markets.

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The ongoing conflict in the Middle East is exacerbating pre-existing vulnerabilities, transmitting shocks through energy markets, trade disruptions, and rising costs, thereby increasing the risk of severe and lasting impacts on the global labour landscape.

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In the countries most affected by the conflict, damage to infrastructure, business disruption, displacement, and insecurity are expected to lead to reduced jobs and incomes, while straining labour market institutions and public services.

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Beyond the region, disruptions to energy, trade, and supply chains are already affecting jobs, wages, and working conditions in many economies, with low-income households, informal workers, migrant workers, and small enterprises bearing the brunt.

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These groups face rising risks of child labour, forced labour, and other severe decent work deficits, according to Houngbo.

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Houngbo emphasized that the Middle East conflict is not an isolated shock, but rather a compounding factor that is increasing the likelihood of more severe and lasting effects on the world of work.

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To mitigate growing labour market fragilities amid intensifying global uncertainty and shocks, Houngbo urged governments to take swift action to protect workers, preserve fiscal space for social protection, and implement active labour market measures.

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He stressed that effective social protection, support for livelihoods, and active labour market policy measures are essential to prevent vulnerable workers and households from sliding further into insecurity.