Global Employment in 2026: A Fragile Stability

In this episode of the Future of Work podcast, we unpack the ILO’s new Employment and Social Trends 2026 report with its lead author, Stefan Kühn, and ILO trade expert Marva Corley. Together, they explore why labour markets look stable yet remain fragile – and what this means for job quality, inequality, and the future of work.

ILO Future of Work Podcast – Employment and Social Trends 2026

International Labour Organization

Host: Welcome to the ILO Future of Work podcast, where we explore the stories and trends shaping the world of work. In this first episode of the year we take a close look at the brand‑new Employment and Social Trends 2026 report. The report’s message is clear: global labour markets look stable, but that stability hides deeper problems. What is holding back job quality? How are demographic shifts and rapid technological change, including AI, transforming work across regions? And how are evolving trade dynamics reshaping employment and prospects?

Joining me today are Stefan Kühn, senior economist in the Macroeconomic Policy and Labour Market Trends unit and lead author of the report, and Marva Corley, senior economist and trade expert at the ILO. Welcome and thank you both for being here.

Core Message of the Report

Stefan Kühn: The core message is that despite deep changes and uncertainty, global labour markets remain stable. The global unemployment rate is projected at 4.9 % in 2026, the same level as since 2023. This stability masks serious underlying challenges.

A second core message is that stable labour markets are not necessarily healthy. Progress toward decent work is stalling. Decent work is fundamental for social justice—it means not only employment but also a decent income, social protection, and rights at work. Key indicators such as informality and working poverty have slowed markedly.

• Today 284 million workers live in extreme poverty (less than $3 per day).

• In low‑income countries, half of all workers are in extreme poverty, and the number of working‑poor is rising because progress in abolishing working poverty has stalled.

Informality

Stefan Kühn: Globally 57.7 % of workers—about 2.1 billion people—are in informal employment. The transformation toward more productive sectors with better working conditions has slowed over the past decade, and progress within sectors to reduce informality is also very slow.

Productivity

Stefan Kühn: Weak productivity growth is a major concern for decent work. Productivity growth is essential for income growth and for ensuring that gains reach workers rather than a few owners. It underpins reductions in working poverty, improvements in working conditions, and higher standards of living.

Youth

Stefan Kühn: Young people continue to struggle. They face higher unemployment because of limited experience, and one in five youth (about 260 million) are not in employment, education, or training (NEET). The share of NEETs is stabilising rather than improving, despite Sustainable Development Goal targets.

Impact of AI

Stefan Kühn: Currently AI’s impact on jobs appears limited, consistent with the stable labour‑market picture. In the medium term it could change, especially as high‑income countries face flat or shrinking labour‑force growth, raising the risk of labour shortages. In low‑income countries, large numbers of young entrants continue to face low‑quality employment.

Gender Gaps

Stefan Kühn: Gender gaps are global: only two‑out‑of‑five workers are women, despite women comprising half the population. Gaps vary regionally, but the main issue is unequal access to the labour market.

Divergent Regional Trends

Stefan Kühn: Unemployment trends are broadly similar worldwide, but labour‑market realities differ sharply. Informality, working poverty, and working conditions vary by region.

• Asia has driven most improvements in work quality over recent decades, but progress is slowing.

• Africa is experiencing a decline in work quality as its share of the global labour force expands rapidly, contributing to global stagnation.

Trade Dynamics and Global Risks

Marva Corley: Uncertainty—particularly trade‑policy uncertainty—has become a key short‑term risk. Trade restrictions, geopolitical tensions, and supply‑chain disruptions make it harder for firms to plan, invest, and hire. Our analysis shows that even moderate rises in trade‑policy uncertainty can push wages down, especially in economies deeply integrated into global supply chains (e.g., Southeast Asia, Southern Asia, Europe, Central Asia).

Why Trade Still Matters for Job Quality

Marva Corley:

• Composition shift: Trade is moving toward services; nearly half of the 465 million jobs created by trade are service‑related.

• Geographic shift: More trade now occurs between middle‑income countries than between high‑income ones, affecting regional job creation.

• Job quality: Jobs linked to trade tend to be higher‑quality—more formal, better paid, and with stronger employment relationships—especially in low‑ and middle‑income economies. This supports efforts to reduce informality and increase employment for women and youth.

Future Implications

Marva Corley: As trade becomes more service‑oriented, the required skill sets will evolve. Policymakers must ensure that new jobs are decent, productive, and provide living wages, security, and voice for workers.

Opportunities for Improving Living Standards

Marva Corley:

• Market access: Shifts in trade patterns open new markets and supply‑chain entry points.

• Policy design: Trade agreements increasingly embed labour provisions, living‑wage clauses, and mechanisms for social dialogue.

• Productivity & AI: In regions facing ageing workforces (e.g., Europe and Central Asia), accelerating productivity—potentially through AI—can offset labour‑force shrinkage, provided AI benefits are broadly shared.

What Needs to Happen Next?

Marva Corley: The report calls for coordinated action and stronger institutions to advance decent work and social justice. Practical steps include:

• Strengthening social dialogue among governments, employers, and workers to address emerging challenges such as AI‑driven job transformation.

• Integrating labour considerations into trade policy from the outset.

• Recognising that improving wages, security, and freedom at work boosts productivity, firm profitability, and overall economic resilience.

End of episode.