Global unemployment steady but decent work stagnates as AI and trade risks loom, warns ILO

Global unemployment is expected to remain stable this year, but progress towards decent, secure and fairly paid work has stalled, the International Labour Organisation (ILO) has warned, with young people and workers in poorer economies facing some of the toughest conditions.

The UN agency’s Employment and Social Trends 2026 report projects the global unemployment rate will stay at around 4.9%, representing roughly 186 million people out of work. However, the headline stability masks deeper problems in job quality, inequality and labour market resilience.

The ILO notes that employment growth is strongest in low-income economies, 3.1% this year compared with 0.5% in upper-middle-income countries, reflecting ageing populations and shrinking labour pools in wealthier nations. But more work does not necessarily equate to better livelihoods.

Nearly 300 million workers globally remain in extreme working poverty, earning under $3 a day, while around 2.1 billion people are expected to work in the informal economy with little or no protection, security or rights.

“Global unemployment is projected to remain unchanged at 4.9% in 2026,” the report states. “However, this stability should not be mistaken for a return to healthy labour market conditions. Progress in job quality has stalled, inequalities remain entrenched, and labour markets are increasingly exposed to economic, demographic and technological risks.”

Youth employment under pressure

Young people remain among the most vulnerable. In low-income countries, 27.9% of youth are neither in work, education nor training. Even in wealthier economies, the outlook is uncertain, with artificial intelligence and automation posing new challenges to job creation and access to stable employment.

The broader global jobs gap, people who want paid work but cannot secure it, is forecast to hit 408 million in 2026.

Persistent gender inequality

The report highlights continuing gender disparities. Social and structural barriers mean women are still 24% less likely than men to participate in the labour force, with earlier gains in equality showing signs of slowing.

Trade turbulence hits workers

The global labour market is also feeling the effects of international trade uncertainty, particularly following upheavals in US trade policy. Trade supports around 465 million workers worldwide, over half of them in Asia and the Pacific, but wage pressures are rising in several regions, including Southeast Asia, Southern Asia and Europe.

“Coherent and coordinated response” needed

ILO Director-General Gilbert Houngbo urged governments, employers and workers’ organisations to act together to protect labour markets and advance social justice, especially for poorer nations at risk of being left behind.

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

Economic performance is sharply divided between Gulf economies and the wider region. GCC nations, buoyed by investment, diversification and a mix of hydrocarbon and non-oil growth, recorded GDP growth of 3.9% in 2025, with 4.3% expected in 2026. Non-GCC economies, however, remain weighed down by conflict and structural weaknesses, with growth at 0.7% last year.

Labour force participation remains low overall at 49.5%, with stark gender gaps: women’s participation in GCC economies was 39.5% versus 86.7% for men, and far lower in non-GCC states.

While AI adoption could bring productivity gains, with 14.6% of jobs showing augmentation potential, women face higher automation risks than men. Unemployment across the Arab States stood at 9.5% in 2025.

Asia and the Pacific

Regional GDP growth eased slightly to 4.4% in 2025. Unemployment averaged 4.1%, though youth unemployment remains a major concern in parts of Eastern Asia, including China, where urban youth unemployment approached 19% last year.

Trade disruptions and slowing global demand are weighing on manufacturing jobs, with millions of roles across Asia exposed to changing US trade dynamics. Though manufacturing employment continues to rise as a share of total jobs, conditions remain precarious for many younger workers, particularly in China, where temporary and agency-based work is expanding.

Informality remains high at 65.4% of employment, with 200 million workers living below the moderate poverty threshold.

Africa, decent job creation continues to lag behind rapid population growth, deepening labour market pressures across the continent. Informality dominates, with nearly nine in ten workers engaged in informal employment, while working poverty remains widespread, more than half of workers still live below the moderate poverty line, highlighting persistent structural and socioeconomic challenges. 

Latin America and the Caribbean recorded positive momentum, with employment rising by 4.4 million between 2024 and 2025 and pushing the employment-to-population ratio slightly up to 59.3%. However, informality remains stubbornly high, accounting for 51.1% of jobs, while youth unemployment stands at 11.9%, almost three times the adult rate, underscoring ongoing inequality and barriers to opportunity. 

In North America, labour market conditions are beginning to soften. Employment growth is slowing, job vacancies are declining, and unemployment is expected to rise in the medium term in both the United States and Canada as economic headwinds and policy tightening weigh on hiring and workforce expansion.

In Europe and Central Asia are seeing relatively stable labour markets, with unemployment holding at 5.5 per cent. However, informality remains a concern, particularly in Central and Western Asia where 31.5 per cent of workers are in the informal economy, compared with 13.8 per cent in Eastern Europe and just 3.6 per cent in Northern, Southern and Western Europe. The region also faces long-term structural challenges, with ageing populations expected to sharply increase the old-age dependency ratio by 2050, posing risks to productivity and economic stability.

The UN is urging stronger policy action, calling for increased investment in skills, education, and infrastructure, alongside focused efforts to bridge gender and youth employment gaps. Responsible use of technology, strengthened trade, promotion of decent work, and coordinated global and domestic policies will be critical to managing rising risks related to debt, AI disruption, and trade uncertainties.