Full Recovery in Global Labor Market Could Take Years

On Jan 17, 2022

It will take at least two years before global unemployment falls back to pre-pandemic levels, according to fresh projections, with joblessness in poor countries remaining high even as labor markets in rich countries become increasingly tight.

The pandemic upended the global labor market, initially sending unemployment soaring around the world. A surge in demand following the reopening of rich economies such as the U.S. created huge disruptions in labor markets, as companies scrambled for workers. But at the same time, a lack of vaccines in many poor countries is keeping unemployment high.

The U.S. labor market is nearing, or may already be, at full employment, but a United Nations agency said Monday that is far from true in many other parts of the world, with the Omicron variant of the Covid-19 virus is likely stretching out the process of getting people back to work.

In new forecasts, the Geneva-based International Labor Organization said the number of hours worked globally will likely recover at half the pace it had previously projected for this year, with the number of unemployed workers falling to 207 million this year from 214 million last year, and to 203 million in 2023, still well above the 186 million recorded in 2019.

“Two years into this crisis, the outlook remains fragile and the path to recovery is slow and uncertain,” said

Guy Ryder,

the ILO’s director-general.

The U.N. body said the weaker-than-expected recovery in employment was largely as a result of the spread of new variants of the Covid-19 virus, including Delta and the more recent Omicron, each of which have led to closures of parts of the global economy and in particular hindered the recovery of the tourism and international travel industries.

It also stressed the unbalanced nature of the recovery, with employment rebounding much faster in richer countries. In the U.S., the unemployment rate was 3.9% in December, and many economists believe the country is at or near a state of full employment, in which just about anyone who wants a job can get one.

Even in the eurozone, where employment recoveries have typically been slower than in the U.S., the unemployment rate was below its pre-pandemic level in November at 7.2%.

The American workforce is rapidly changing. In August, 4.3 million workers quit their jobs, part of what many are calling “the Great Resignation.” Here’s a look into where the workers are going and why. Photo illustration: Liz Ornitz/WSJ

The ILO said that while rich countries account for just one-fifth of the global workforce, they will likely account…