Beyond job losses, Middle East crisis puts job quality at risk, warns ILO

The escalating conflict in the Middle East could inflict more enduring damage on global labour markets than the COVID-19 pandemic, the International Labour Organisation (ILO) has warned, urging governments to act swiftly to mitigate long-term economic and social fallout.

In a recent insight, the ILO highlighted the far-reaching implications of the crisis, cautioning that its effects on jobs, incomes, and working conditions may unfold gradually but prove more persistent than previous global shocks. Sangheon Lee, Chief Economist at the ILO, noted that the unfolding crisis presents unique challenges compared to past disruptions.

“Previous crises, including COVID-19, brought huge and immediate shocks, but recovery often began once restrictions eased and support measures were put in place,” said Sangheon Lee. “The current crisis, coming on top of a series of polycrises, may unfold differently.”

According to the ILO, the crisis could ripple across economies through repeated price shocks, heightened uncertainty, weaker investment, disrupted migration systems, and persistent strain on household incomes. 

Beyond the frontline, the repercussions are spreading globally through rising fuel and food prices, delayed investments, weaker hiring, and declining remittances. These pressures disproportionately affect low-income households, migrant workers, and small enterprises, heightening economic vulnerability.

Job quality is also at risk. The ILO warns that prolonged instability could lead to increased informality, worsening working conditions, downward pressure on wages, and a rise in working poverty. There are additional concerns about the potential resurgence of child labour, forced labour, and other harmful coping mechanisms.

“What begins as an external shock can leave deeper scars by weakening the conditions that make work decent, secure, and protected,” Lee said.

The conflict has already triggered volatility in energy markets. Oil and gas prices surged by more than 50% at their peak, significantly affecting transport and production costs. 

According to the United Nations Conference on Trade and Development, global merchandise trade growth in 2026 could slow from 4.7% to between 1.5% and 2.5%, potentially impacting employment and incomes worldwide.

The crisis has also strained public finances, with many governments entering the period burdened by high debt and limited fiscal space, making policy responses more challenging.

The ILO stressed that proactive measures are essential to prevent temporary shocks from becoming permanent setbacks. 

Recommended interventions include temporary income support for affected households, wage subsidies, protection of social security systems, and assistance to small and medium-sized enterprises.

“Early attention to these risks matters, because once jobs, incomes and business capacity are lost, recovery becomes harder and more uneven,” Lee said, warning that a wait-and-see approach would be risky.

The conflict intensified in late February following airstrikes by the United States and Israel on Iran, reportedly resulting in the death of Iranian Supreme Leader Ali Khamenei. A ceasefire has been in place since April 8, prompting calls for diplomatic engagement.

António Guterres, Secretary-General of the United Nations, has urged constructive dialogue to secure lasting peace. His spokesperson, Stéphane Dujarric, emphasized the importance of maintaining the truce, stating that “the ceasefire must absolutely be preserved.”

The ILO underscored that the most enduring consequences of the crisis may not be limited to physical destruction or economic losses but could manifest in weakened labour markets and rising inequality long after the conflict subsides.

“What is needed now is close attention to how these risks are unfolding, and early action to protect jobs, incomes and working conditions,” Lee concluded.

As geopolitical tensions persist, the global community faces a critical test: safeguarding decent work and economic stability in an increasingly uncertain world.