World Economic And Social Outlook: Higher Wages Will Solve The Cost Of Living And Jobs Crises

The ITUC demands that governments do more to raise wages, expand social protection and support collective bargaining in response to the ILO’s latest World Economic and Social Outlook (WESO).

The annual WESO suggests that:

• The Ukraine conflict, an uneven recovery from the pandemic and ongoing bottlenecks in supply chains have created the conditions for stagflation in 2023.
• The absence of increases in labour incomes have created a cost-of-living crisis that threatens the livelihoods of households and risks depressing demand.
• The global jobs gap stood at 473 million in 2022, a rate of 12.3%, with a gender jobs gap to match the gender pay gap: The jobs gap for women is 15%, compared with 10.5% for men.
• Global employment is projected to expand by only 1% in 2023, down from 2.3% in 2022.
• Only 47% of people worldwide are covered by at least one social protection benefit.
• The unemployment rate for young people aged 15-24 is three times higher than that for adults.

ITUC Deputy General Secretary Owen Tudor said: “It is clear that governments need to take urgent steps to improve living standards, create jobs and prevent the growth of child labour. If they do this, they can stop the worst that is described in the WESO.

“They can tackle these serious economic challenges for working people by raising wages, including minimum wages, improving social protection, and supporting collective bargaining that will raise salaries in the private sector. Higher wages for working people are part of the solution, not part of the problem.

“The WESO makes for grim reading, but we welcome the concept of the global jobs gap that reinforces our call to create 575 million new jobs by 2030 to reach full employment. Plus, by implementing our demands as part of a New Social Contract governments have the answers to meet the challenges.”

A New Social Contract

As part of the ILO Global Coalition for Social Justice, a New Social Contract should focus on:

• Formalising at least one billion informal jobs.
• Expanding social protection and investing in public services, especially health, education and training, the care economy and innovation.
• Creating decent, climate-friendly employment as part of a just transition.

“These demands can be the building blocks of undoing the harm caused by corporate greed,” continued Owen Tudor.

“Unfortunately, this WESO repeats the fallacy that falling productivity is behind the drop in incomes. Our own analysis proves that the productivity of working people has continued to rise, but they have not benefited. Meanwhile top corporates have been richly rewarded despite capital productivity stagnating.

“Through implementing a New Social Contract, governments can start to undo these wrongs and deliver the economic justice that working people deserve.”

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