Global unemployment remains stable, but progress toward decent work has stalled, according to a new report from the International Labour Organization (ILO). The report also warns that young people continue to struggle, while artificial intelligence and trade policy uncertainty risk further undermining the job market.
The Employment and Social Trends 2026 report finds that while the global unemployment rate is projected to stay at 4.9 per cent in 2026 - equivalent to 186 million people - millions of workers around the world still lack access to quality jobs.
"Resilient growth and stable unemployment figures should not distract us from the deeper reality: hundreds of millions of workers remain trapped in poverty, informality, and exclusion," ILO Director-General Gilbert F. Houngbo said.
Job quality under strain
Nearly 300 million workers continue to live in extreme poverty, earning less than US$3 a day, while informality is rising, with 2.1 billion workers expected to hold informal jobs by 2026, with limited access to social protection, rights at work, and job security. The acute lack of progress in low-income countries is pushing workers with the poorest employment conditions even further behind.
The report - which offers data by region, income group, sex and age - notes that the slowdown in shifting economies into higher-value industries or services is a major obstacle to sustained progress in job quality and productivity growth.
Youth and AI risks
Young people continue to struggle. Youth unemployment climbed to 12.4 per cent in 2025, with around 260 million young people not in education, employment or training (NEET). In low-income countries, NEET rates are a daunting 27.9 per cent. The ILO warned that artificial intelligence and automation could exacerbate challenges, particularly for educated youth in high-income countries seeking their first job in high skill occupations.
"While the full impact of AI on youth employment remains uncertain, its potential magnitude warrants close monitoring," the report noted.
Entrenched gender inequalities
Women still face entrenched barriers, largely driven by social norms and stereotypes. They account for just two fifths of global employment, and are 24 per cent less likely than men to participate in the labour force. Gains in female labour force participation have stalled, slowing progress toward gender equality at work.
Demographic shifts reshape labour markets
The report also analyses how shifting demographics are reshaping labour markets.
Ageing populations are slowing labour force growth in richer economies, as fewer people of working age are available to enter or remain in employment, while low income countries struggle to turn rapid population growth into productive jobs. Employment growth in 2026 is projected at 0.5 per cent in upper middle income countries, 1.8 per cent in lower middle income economies, and 3.1 per cent in low income ones. Without sufficient productive job opportunities, poorer countries risk squandering their demographic dividend, the ILO warned.
Weak labour productivity growth in low income countries is also deepening geographic inequalities, hindering progress toward decent work, and slowing the convergence of living standards with advanced economies.
Trade turbulence
Global trade disruptions are adding uncertainty to labour markets. Uncertainty about trade rules and supply chain bottlenecks are cutting into workers' wages, especially in Southeast Asia, Southern Asia, and Europe. Nevertheless, trade remains a major source of jobs, supporting 465 million workers worldwide, more than half of them in Asia and the Pacific.
Trade can be a powerful driver of decent work, particularly in low and middle income countries, where export-linked sectors often provide better pay, lower informality, and more opportunities for women and youth, the report notes. Digitally delivered services now account for 14.5 per cent of global exports, and nearly half of all trade-related jobs are in market services. Although trade among developing economies has expanded, many African and Southern American countries still depend heavily on markets outside the region for most trade related jobs.
The ILO Director-General underscored the need for coordinated action and stronger institutions to advance decent work and social justice, particularly in poorer economies that risk being left behind as supply chains and digital trade expand.
"Unless governments, employers, and workers act together to harness technology responsibly and expand quality job opportunities for women and youth - through coherent and coordinated institutional responses - decent work deficits will persist and social cohesion will be at risk," Houngbo said.
The report makes some recommendations to address current challenges:
- Implement productivity-enhancing policies such as investment in skills, education, and infrastructure.
- Address gender and youth gaps by tackling barriers to participation and harnessing technology responsibly.
- Strengthen trade and decent work outcomes so all regions benefit from global flows.
- Mitigate risks from debt, AI, and trade uncertainty through coordinated global and domestic policies.
