Labour market fragilities grow as global shocks intensify, warns ILO

Global labour markets may appear stable on the surface, but deep-rooted structural weaknesses and mounting geopolitical tensions are threatening jobs and incomes worldwide, the International Labour Organization (ILO) has cautioned.

Speaking at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank in Washington, D.C., ILO Director-General Gilbert F. Houngbo warned that persistent decent work deficits and escalating global shocks are placing millions of workers at risk.

Despite steady global growth and stable unemployment trends heading into early 2026, Houngbo highlighted underlying vulnerabilities such as widespread informality and extreme poverty that continue to undermine economic resilience and social cohesion.

“The deeper challenge is one of work quality and structural transformation,” he said, noting that 284 million workers still live in extreme poverty. Additionally, 2.1 billion people—nearly 58 percent of the global workforce—remain trapped in informal employment.

In statements to the IMF’s International Monetary and Financial Committee and the World Bank Group Development Committee, Houngbo underscored how rising sovereign debt, limited fiscal space, and economic uncertainty are restricting governments’ ability to support workers and strengthen labour markets.

These constraints, he noted, risk weakening social protection systems and hindering inclusive economic growth, particularly in developing economies.

The ongoing conflict in the Middle East is further exacerbating labour market fragilities, transmitting shocks through energy markets, trade routes, and supply chains. According to the ILO, these disruptions are driving up costs and increasing the likelihood of severe and lasting impacts on employment worldwide.

In the hardest-hit countries, infrastructure damage, business closures, and displacement are expected to reduce job opportunities and incomes while placing additional strain on labour market institutions and public services.

Beyond the region, the ripple effects are already affecting wages, working conditions, and job stability across multiple economies. Low-income households, migrant workers, informal employees, and small businesses face the greatest risks, including heightened exposure to child labour and forced labour.

“The Middle East conflict is not an isolated shock,” Houngbo said. “It is compounding pre-existing vulnerabilities and increasing the likelihood of more severe and lasting effects on the world of work.”

To address these challenges, the ILO has urged governments to act swiftly to protect workers and reinforce labour market resilience. Houngbo emphasized the need for robust social protection systems, active labour market policies, and targeted livelihood support.

“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,” he stated.

He also stressed that reconstruction efforts in conflict-affected regions must integrate labour rights, fair working conditions, and decent work principles from the outset.

Concluding his remarks, Houngbo called on policymakers to recognize that sustainable growth depends on strong labour market foundations.

“Where growth does not generate decent jobs, where informality remains pervasive, and where workers lack security, voice, and protection, societies become far more vulnerable to shocks,” he said. “The persistence of decent work deficits is not only an economic concern, but also a rights concern.”

The ILO’s warning serves as a stark reminder that while global economic indicators may suggest stability, the future of work remains deeply vulnerable to structural inequalities and geopolitical uncertainties.