Labour market fragilities grow as global shocks intensify, says ILO

GENEVA (ILO News) - Global labour markets appear broadly stable, with unemployment steady and growth continuing into early 2026. Yet beneath this surface, structural weaknesses-including widespread informality and extreme poverty-are putting millions of workers at risk, the Director-General of the International Labour Organization, Gilbert F. Houngbo, has said.

In statements to the International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, D.C., Houngbo emphasized that persistent deficits in decent work are undermining social cohesion and economic resilience.

"The deeper challenge is one of work quality and structural transformation. Some 284 million workers continue to live in extreme poverty, while 2.1 billion workers, nearly 58 per cent of the global workforce, remain in informal employment," he said.

Houngbo noted that rising sovereign debt, limited fiscal space, and elevated economic uncertainty further constrain governments' ability to support workers and strengthen labour markets.

Middle East conflict: amplifying global economic and labour market risks

The ongoing conflict in the Middle East is intensifying pre-existing vulnerabilities and transmitting shocks through energy markets, trade disruptions, and rising costs, increasing the risk of severe and lasting impacts on the world of work, the Director-General said.

In the countries most affected, damage to infrastructure, business disruption, displacement, and insecurity are expected to reduce jobs and incomes while straining labour market institutions and public services.

Beyond the region, disruptions to energy, trade, and supply chains are already affecting jobs, wages, and working conditions in many economies. Low-income households, informal workers, migrant workers, and small enterprises face the heaviest burdens, with rising risks of child labour, forced labour, and other severe decent work deficits.

"The Middle East conflict is not an isolated shock superimposed on an otherwise stable global economy. It is compounding pre-existing vulnerabilities and increasing the likelihood of more severe and lasting effects on the world of work," Houngbo said.

Protecting workers and strengthening labour markets

To address growing labour market fragilities amid intensifying global uncertainty and shocks, Houngbo called on governments to act swiftly to protect workers, preserve fiscal space for social protection, and implement active labour market measures.

"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."

In conflict-affected countries, recovery and reconstruction must embed decent work, labour rights, social protection, and fair working conditions from the outset, he said.

Houngbo urged policymakers to draw lessons from the current crisis, emphasizing that economic resilience cannot be built on weak 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. This is why the persistence of decent work deficits is not only an economic concern, but also a rights concern," he said.