ILO Press conference: Launch of the “World Employment and Social Outlook: September 2024 update” report
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Press Conferences | ILO

ILO Press conference: Launch of the “World Employment and Social Outlook” report

Speakers:  

  • Celeste Drake, ILO Deputy Director-General
  • Steven Kapsos, Head of the Data Production and Analysis Unit, ILO
Teleprompter
OK, I think we can, uh, start.
Good morning, everyone. Bonjo,
thank you for being with us today.
My name is Zain Award and I am the head
of news and multimedia for the International Labour Organisation.
I'm, uh, very pleased to have, uh, with us today.
Uh MC Drake, our deputy director general
as well as our colleague Steven Kapos,
who's the head of data production and analysis unit at the I.
And we're here to share with you the, uh,
latest outlook the September 2024 outlook for the World employment social
um outlook findings.
So without further ado, I'll hand over to Celeste to do present the findings over to
Celeste.
Thank you so much. Good morning, everyone.
And thank you for your interest in the IL OS World Employment and Social Outlook,
September 2024 Update.
We are pleased to launch the report and discuss it with you here today.
This report is part of our wiso
series and follows the WEO
trends Report launched in January
and the WEO update published in May.
This report we're launching today highlights
important trends in two key SDG labour market indicators
and the first one that I will discuss is the labour share the labour income share.
This indicator measures the proportion of total income in
an economy that is earned by workers through
wages and salaries and income from self-employment.
The share of income that goes to workers is
often used as a key indicator of inequality.
The lower share for workers means a larger share of
income is going to capital owners who are typically wealthier
and thereby it indicates higher levels of income inequality.
The syndicators also used to measure progress towards SDG goal 10
to reduce inequality between and within countries.
Our new report shows that there has been a
long term global decline in the labour income share,
which dropped 1.6% points between
2004 and 2024
to 5. 52.3%.
Although this decline might appear modest in terms of percentage points
in 2024 alone, it means that workers are receiving
2.4 trillion less in purchasing power parity than they would have
earned had the labour income share remained stable since 2004.
Significantly, nearly 40% of the decline
in the labour income share observed over the past two
decades occurred during the three years of the COVID-19 pandemic
and this reflects the severe effects the pandemic had on labour markets.
At the global level,
there has simply been no recovery in this indicator over the past two years.
In terms of why
the labour income share is declining,
the report investigates one potential factor,
namely the role that technology could be playing.
What we find is that technology, technological innovation and specifically,
automation,
while boosting productivity and output has also contributed to the
decline in labour income share during the last two decades.
This doesn't mean that innovation has made workers worse off to the contrary,
technological advances tend to raise incomes and boost economies.
However,
a declining labour income share is a
signal that these changes are likely contributing
to rising inequality
in the world of work.
This outcome, however, is not set in stone.
It will depend on policy decisions,
which is why it's crucial to guide artificial intelligence development
to avoid increasing inequality and to make
sure that its benefits are shared broadly.
This can be done, for example, through policies to create and strengthen
universal social protections, minimum wages, freedom of association
and social dialogue, including collective bargaining.
The second key indicator that's analysed in today's report
is the share of youth not in employment, education or training,
otherwise known as the neat rate.
This is another important sustainable development goal indicator
that is unlikely to be achieved by 2030 based on current trends.
Indeed, the latest data show that the world is also off track regarding the goal.
To reduce the neat rate,
The global neat rate
has seen only a modest decline since 2015,
falling from 21.3% to 20.4%
in 2024.
The report also finds that large gender inequalities remain
in young people's access to education
and employment.
The female youth neat rate incidents is 28.2% in 2024
which is more than double the incident among young men,
which is 13.1%.
Our report stresses the need
to increase efforts to provide decent work opportunities
and to improve access to education and training,
particularly in the regions where they have the highest incidence of meat
in some.
This new update underscores significant shifts in the world of work
and It cautions that technological advancements,
despite being an essential driver of economic growth,
can also have important impacts on the distribution of income.
Additionally, the persistent high neat rates among youth,
particularly for young women,
signal that the goal of reducing youth disengagement
from employment and education is also at risk.
These trends suggest that without strategic policy interventions,
the related sustainable development goals to reduce inequality
simply won't be met by 2030.
The findings emphasise the urgent need for policies to ensure inclusive growth
and equitable access to opportunities in
the rapidly evolving global labour market.
Thanks for your attention
and we'll ha! We will be happy to answer your questions.
Thank you very much. Uh, Celeste, uh, for your presentation.
So we now open the floor to questions.
Uh, I would like to ask you to, um, introduce yourself and your outlet, uh,
once you have the floor,
please.
Good morning. My name is Chris Vogt.
I work for a
France pa.
Uh, I was just wondering if you so,
uh, you told about the, um, very heavy impact of covid after three years of covid
on the numbers.
but could you give us a sense of what are the other
key factors that that are at play where when in terms of,
uh, revenue for employees that
the share goes down? Uh, what what other
engines of this trend are there?
Absolutely. So this trend is caused by multiple factors,
including globalisation.
Uh, the makeup of global labour markets.
Uh, technological advances? Certainly covid.
Um I was just discussing with Steven,
um, that the rapid inflation that was a result of of covid has some factor,
and it's not
possible to
suss out exactly what percentage contribution all of these different trends make.
But the one thing that this report analyses
is the impact of rapidly developing technological deployment.
So we we didn't address specifically all of the other factors.
And I don't know, Steven, if you have anything you want to add there,
Sure. Thanks,
Celeste.
I mean,
when we when we, uh, focused in on the role of technology,
Um, the analysis was constrained to 36 countries, uh,
mainly high income countries, because it's a very data intensive exercise.
Uh, but what we found was that when you have a positive technological shock,
especially something that helps automate tasks that used to be done manually.
What you see is,
uh, an increase in
output per hour worked labour productivity.
So you see that and it's a a sustained increase. So beyond four years, we see
that productivity remains higher and the growth rate remains higher.
You see a boost to economic growth.
So these are very good factors.
you also see a negative impact on employment and on hours worked.
But very importantly, it's a short term negative impact,
and employment and hours work recover
within a couple of years.
But the interesting thing that we found is that
similar to the the increases in productivity and growth.
When you have a positive technological shift,
it lowers the labour income share,
and that effect is persistent even beyond four years.
So what that's basically showing us is that
when we have a positive technological shock,
it's good for the economy as a whole.
But not everyone is is sharing
uh, equally from that.
Thank you for this briefing
from
R. No,
this is a follow up on the Christoph questions.
You are saying that the inflation due to the covid was one of the main reasons.
So can we expect that this trend will continue because the
inflation after the sanctions against Russia make a lot of inflation,
especially in high income countries.
So do we have to expect that this trend will continue
so again I'll start and and might give it to Steven for some more detail.
but these are long term trends. So, for example, the the
specific 20 year rate decline that we gave here was 1.6% points.
they are,
they can't they are not inevitable.
So whether it's technological advancement,
whether it's the fact that we had an inflation shock, um during covid
other factors,
they can be changed by
policy decisions.
And so what we are saying is,
regardless of the specific cause of the decline in labour income share,
if countries are committed
to achieving the sustainable development goals, if they are committed
to advancing social justice and addressing inequality,
they can change these trends, and they can do that through
specific policies designed to promote greater equality
and a greater labour income share. And those things include
universal social protections.
We know those work to address inequalities, um, good minimum wage policies, um,
policies that advance freedom of Association and the effective recognition
of collective bargaining so that workers and employers can negotiate
how to share those productivity gains that Steven just addressed
and also
affect labour administration
so that the policies in place for minimum wages and the right to freedom of
association and collective bargaining and all of these
other things those laws are effectively implemented.
They're effectively enforced.
And they really set guardrails around labour markets so that workers can
share fairly from the gains that they are helping to create.
So I don't know, Steven, if you wanna add anything specific to that
You You covered it perfectly, Celeste.
Um, I would just add that over the last two years, when we've seen, uh,
inflation rates come down, the labour income share has stagnated.
So we haven't seen a recovery, you know,
an increase in the share as inflation has come down.
Um, we don't have projections, uh, for this indicator beyond that horizon,
so we can't I.
I can't give you a forecast this morning.
Um, but
in terms of what we what we've seen over the last two years,
we haven't seen a recovery in in the labour income share,
even though the the price pressures have been moderating.
over that period,
Thank you for next TV from Hong Kong.
Uh, simple question in your report.
well,
as the role of the self, employment is emphasised, Uh,
especially in the developing countries.
So, um,
the method for estimating their incomes is based on the importation, um
or, uh, poxes.
So, uh, how confident
can we be in the
aquis
of those estimations?
And for, um, uh, Steven,
what impact could the potential in our curies have on global,
uh, dis
distribution analysis
and also specifically in the countries who has a high self-employment rate.
Thank you.
OK, I'm gonna let Steven take this question,
because it's very much about our statistical analysis.
So, um, thank you for your question.
You're You're absolutely right that our labour income share estimates include,
um, the income of both uh, employees, uh, and the income of the self-employed.
Um, what I can say is that before the ILO started estimating, uh, uh,
labour income share, uh, providing those data.
The data that existed around the world only covered the compensation of employees
and what we did at the ILO over, uh,
the last 67 years is we've built up a a major repository.
It's actually the world's leading repository
of national Labour Force surveys.
We have 100 and 70 countries that are sharing
their labour force survey data with the ILO.
And that enables us to actually
produce a very credible, uh, estimate of the impact of this, uh,
the income of the self-employed, which is very important,
particularly in developing countries where there's, uh a you know,
self-employment can can be the majority of the workers.
Um, so we have me.
We've we have published, uh, methodological papers, uh, reviewed papers,
Uh, that detail the methodology.
I am very confident that the IL OS labour income share estimates
are the Are the best estimates that we have out there.
Of course, with any estimate, there is a degree of uncertainty.
Um, but what we're putting out today, uh,
is based on the latest available information that we have.
Um, now, I. I have to apologise. I didn't catch the second part of your question.
Could you please repeat that?
The same part is you answered. Is that how could you analyse this
to do that if it, uh uh, impact
uh, if it's not,
uh,
stable.
My maintenance is not
stable. Uh, of, uh, the incomes analyses. How could you,
um
how could you face to this, uh um
uh, income series
the
I think we're still not completely understanding your question.
Are you asking for, um
how the impact
I thought I heard you ask how the impact would be different
on countries that have a greater
share of self-employed
in there. Is that the question?
OK, so, um,
the if you if you
have to estimate the impact or the, um the the income of the self-employed,
Whereas the the data for, uh,
employees comes from UN SD the system of national accounts,
we get compensation of employees and then we estimate self-employment, uh,
income based on the characteristics of the workers who are self-employed.
and and we have A We have a, uh, robust methodology for that.
If you have a higher share of a very high share of self employment,
more of the labour income share estimate that we produce
is is estimated rather than taken from real data.
Go ahead.
But
no direct answer.
I think the ear early this year, um,
we will put the same questions on this somewhere with DG.
Uh, breakfast Probable.
Uh, so it doesn't get any good answer directly. So what is, um
um
So how could you analyse? And if it's not stable incomes? Uh
uh,
share.
Do you mind just raising your voice a little bit? Because we're having a hard time.
Sorry. Hearing you
and earlier of this year, we have the we have had a breakfast with DJ and you prob,
um, we will put the same question, uh, with
today, I didn't get a correct answer or direct answer from, uh,
how could you are analysing this?
Um, if,
um, this potential occurrences have, um,
uh, have owned this global income.
And how could you face to that if, um,
face to the
not stable incoming with, uh, imputation and proxies?
Oh, well, it's not correct, but
it's not evidence.
So,
um, purple
is better.
I can interview you later.
OK, We can take it up later, then. No problem.
I think we had a hand over here over to you, Sir
Boris
Elson, a freelancer.
Indeed, most of the questions I had in mind when raising my hand
first have been asked by my colleague. So I will ask a more general question
before we ask the question.
What I got from your presentation is that any hike
in the labour share of revenue was a step forward towards
social justice and that the ultimate paradise would be 100 of income
to labour and that anything across this way was a rip off by greedy
shareholder
to buy more caviar.
Then we ask questions and you were a little bit more. Let's say down to us.
So
my question is
considering also that over the years I
had to admit that it represents only that four wage workers represented at ILO
are in fact about one out of 10 workers actually worldwide.
So can you tell us more about the real cause and the real
good and evils of this drop in
the labour share?
The labour share in Big Corporation has been around two thirds for generations.
Now it's a little bit less, but marginally less so. Can you elaborate a little bit
more on that on sectoral differences on
and on these poor ignore forgotten workers
to whom I belong as a freelancer which are not for wage workers and not in your
let's say, focus of interest.
So so thanks for that question.
And I think the discussion that we were
just having regarding the self employed are exactly
the folks that you were talking about freelancers who are self employed and and I.
I don't think that's the the message of our, um,
of what we're saying on on Labour Income share.
It's not to have, uh, 100% for either side.
But it is one measure, not the only measure of inequality,
and we can look at the country level or we can look at the global level.
And what we are saying is, as we are moving toward 2030
looking at progress on the sustainable development goals,
we do need to take into consideration
the labour income share as these economies are growing,
whether again at the country level or at the global level.
And if we can say, here's how much of the growth there was,
how much are working people, including the self employed sharing in that growth?
And if we want to become more equitable,
we want to make sure that that labour income share isn't falling,
that they're not getting a smaller and smaller share of all of the gains.
That's our basic point.
Not that there is some perfect measure of how income should be distributed,
but certainly when you have the level of
poverty,
unemployment,
neat
inequality in the world, when you have decent work deficits,
when you have a lack of social justice,
these things of trying to increase equalities
and achieve the SDGS are quite important.
And that's really our That's really our,
um goal here and to say that when we have a labour income share that's declined,
that's not inevitable.
And as we have concerns about it,
policymakers have choices to try and make
sure that that labour income share isn't declining
and they can put in place policies to counteract what is happening in the markets.
And as we said, there are many factors. It's it's, there's not,
you can't say,
Um there's one input and it leads to the output of a decreasing labour income share.
There are many factors. This report that we're releasing today
really looks at the technological factor,
but there are other factors around globalisation, the operation of markets.
As we said inflation, I don't know Steven, if you wanna add anything to that,
Ok.
Ok, thanks.
Question suggested by your and, uh, reply.
You refer to the SDGS
a
question I never dare asking. You are the first to be
to have the privilege. Are all UN agencies committed to support the SDGS?
Because me, as a self employed person,
I have at least one freedom is not to think
like you and to be free to think ill of the
SDGS and all the silly things I consider they contain.
Uh, do you have that freedom? Does your boss have that freedom? And if not,
um, are you sure that it is good, good and socially advanced not to have that freedom?
So I would say, um, we are one UN system,
and the UN system is committed to achieving the SDGS.
Thank you.
Mr.
President,
I
think we've got a couple of questions online, but I think I saw a hand, so
please go ahead.
Uh uh, thank you for taking my question.
My name is
Hatakeyama, Uh,
Kyodo news.
I'd like to ask, uh, about the productivity.
Uh, the increa increase of productivity and the
decrease of income. Sh uh, labour income share
as, uh, Stevenson might have, uh, mentioned already. But, uh, you know,
the increase of active productivity, Uh, thanks to development of technology
and, uh, the decrease of labour income share. Uh, you know,
these, uh, two, relationship. You know,
uh, it's like, um
uh, it seems, uh, jumping IN logic, uh, to me.
So could you elaborate a little bit more? Uh, the the relationship between
productivity increasing and, uh,
uh, Labour income share decreasing.
Thank you.
Sure. So So I'll start. And I'll, I'll hand it off to my statistical expert.
I think I wanna be clear that what we're
saying is we are reporting on trends that are happening
right now, not absolute identities.
So it's not the case that every time productivity goes up,
labour income share has to decline.
What we're saying is, this is what reporting
we are reporting now. It's something that we can measure
as a trend for for the last 20 years.
Um, if you look into the report, you will see, um,
the charts and graphs that tell you how it's actually bounced around.
But there is a
trend that labour is not keeping up.
This can be counteracted by
policies. It's not a given that this is an outcome.
And it's not that the ILO is saying it's a problem when productivity increases.
In fact, we work to increase productivity because that does create
the gains that allow
job creation economic
growth more dynamic economies that can create decent work and social justice.
But these are not given outcomes.
They are outcomes that must be directed by appropriate
policies to advance decent work and social justice.
So now I'll have Steven give you the hardcore statistical answer.
Thank you, Celeste.
So we have on page three in the report, actually going directly to your question, um,
over the period from 2004 to 2024
output, uh, per hour worked.
So labour productivity measured is output per
hour worked globally increased by 58%.
That's a very positive trend. That's That's a a
big boost in in how much output each hour of work generates, and that's in real terms.
Over the same period,
labour income, real labour income
per hour worked grew by 53%.
So there's a There's a wedge there of of 5% points between how much
productivity grew over that period And how
much labour income grew over that period.
And that's
leading to this decline in the in the labour income share.
I hope that helps.
Thank you.
OK, I don't see any more, um, hands in here. So in the room. So we'll go
to our participants online, and I'd like to give the floor to Laurence
Tho, please.
Yeah, Thanks. Jos
VUIS news agency. Thanks for the press conference.
Um, in the report, you mentioned that two regions Europe and Central Asia have been,
uh, doing better since, uh, 2023
and that there has been a recovery in these two regions where it it was.
Whereas it wasn't the case in the other ones.
So how do you explain that?
Are the reasons the same in both regions,
or are there particular reasons in each of them?
Thank you.
So, um, we didn't, uh,
in the report, go into Thank you for the question,
but we didn't go into the the factors this is, you know, it's a brief.
Uh, it's it's meant to provide the latest figures.
There are an A a large
number of, uh, potential explanations.
Um you know, 11 factor specifically when we're looking at Europe,
A lot of the types of policies that our DDG
has been talking about in terms of freedom of association,
uh, right to collective bargaining.
Um, you know, um, stronger.
Uh uh, labour unions, you know, in within the European region.
It scores quite high on on all of those in in many European countries.
So that could be part of the resilience.
Um, but we we did not in in this brief go into that. It's It's for future work.
Thank you.
I don't see any other hands online
or in the please go ahead.
Some people think that in spite of all analysis,
we are on the,
uh what you call, uh
uh, step door
of a major global economic crisis where all social narratives will be obsolete.
Do you study at least this as a
hypothesis? As a scenario,
Um, that is not at all covered in in this report. And I don't
I mean, I think to to look at, um,
our most in depth work on world employment and social outlook. Um,
you would look not at the
this brief update,
but our longer we O trends report, uh, which comes out
annually and the next one will be in next January.
So I think that's the best answer we have to that question.
Thanks.
Thank you.
There is actually one more question online in the chat.
And it's from, uh, uh,
zig
a journalist with the Hindu newspaper in India
and, uh, two questions.
Rather,
the report flags the role of a I in the decrease in
labour income and suggests that any benefits of a I are widely
distributed.
What did the sample survey in 36 countries find?
Is there any monopolisation on this emerging tech?
The second question,
what is the specific impact of this on Asia that supplies a
large number of workers around the world in almost all sectors?
So, uh, with regard to the first part of the question,
um, the the 36 countries, Uh, sorry. Can you repeat, could you please repeat the
OK,
I'll repeat the first question.
The report flags the role of a I in the decrease in labour
income and suggests that any benefits of a I are widely distributed.
What did the sample survey in 36 countries find
Is there any monopolisation of this emerging tech?
Thank you.
So the actually, the analysis on 36 countries covers the period from 2003 to 2019.
So it's pre covid, but it's also
pre
generative A I, uh, in terms of use in in the real world.
So we can't say from the analysis, Uh, what is happening due to a I right now,
But what we can say
is that if the technological advancements, uh,
that we're that we're seeing from generative A I
behave in a similar way.
Uh, as previous positive technology shocks that we saw between 2003 and 2019,
we would expect,
based on the earlier relationship,
to see a decline in labour income share from these technologies.
And
can you repeat the second part of the question as well? Of course.
What is the specific impact of this on Asia that supplies a
large number of workers around the world in almost all sectors?
Um, unfortunately,
we don't have AAA regional breakdown of you know of of this analysis.
So I, I don't think I can answer it specifically for Asia.
Um, what I what I would say? Um
in
Asia is that,
um obviously there's, uh, you know, large. What?
What happens in Asia will matter a lot for the world, given the the the the size, uh,
given the size of Asia, Uh, it's already waiting a lot within, uh,
our our current estimates.
So, you know,
the the takeaways would be very similar, I think to what?
We're what What our DDG has presented at the at the global level.
And I think, unfortunately, that's as detailed as we can get for Asia.
Aside from the figures that we've presented, um uh,
in the various charts in the report, Thank you
and yeah, and I'll just sum up by saying
again, since it's it's
our
global
recommendations.
Um, what we would recommend for Asia specifically would be the same
that as new technological innovations are rolled out in the economy,
we expect them to increase productivity.
And if we're looking to offset
any projected reductions in labour income, share that specific policies
to counteract that
to promote
equalities rather than inequalities can help. And those policies include
promoting universal social protections, promoting minimum wages,
promoting freedom of association social dialogue
and including, uh, collective bargaining.
These together with effective labour administrations to implement
the regulations and laws and to make sure that they're enforced those can help
offset any trends that would further decrease the labour income share.
Thank you.
Thank you very much.
Any more questions?
OK, I don't see, uh, any questions, so just, uh, before we close, Um,
a reminder that the embargo lifts at 1130 central eastern time, which is
in about 25 minutes from now.
Uh, thank you to our panellists and thank you all for being with us today. Bye bye.