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The International Labour Organisation has revealed the growing disparity between labour and capital income, raising concerns about the challenges young people face in the job market.
According to the newly released ILO World Employment and Social Outlook: September 2024 Update, upward pressure on inequality is found as the labour income share stagnates and a large share of youth remain out of employment, education or training.
The report indicated slow progress on key Sustainable Development Goals as the 2030 deadline approaches.
The study stated that the global labour income share, which represented the portion of total income earned by workers, fell by 0.6 per cent points from 2019 to 2022 and had since remained flat compounding a long-running downward trend.
It stated that if the share had remained at the same level as in 2004, labour income would be larger by $2.4tn in 2024 alone.
The study further highlighted the COVID-19 pandemic as a key driver of the decline, with nearly 40 per cent of the reduction in the labour income share occurring during the pandemic years of 2020-2022.
“The crisis exacerbated existing inequalities, particularly as capital income continues to concentrate among the wealthiest, undermining progress towards SDG 10, which aims to reduce inequality within and among countries,” it noted.
According to the report, technological advances, including automation, have played a role in this trend. “While these innovations have boosted productivity and output the evidence suggests that workers are not sharing equitably from the resulting gains,” ILO added.
Meanwhile, the report warned that without comprehensive policies to ensure that the benefits of technological progress were broadly shared, recent developments in the field of artificial intelligence could deepen inequality, putting the achievement of the SDGs at risk.
According to the National Bureau of Statistics’ labour force survey Q4 2022 & Q1 2023, the share of wage employment was 13.4 per cent in Q4 2022 and 11.8 per cent in Q1 2023.
It highlighted that about one-third (36.4 per cent in Q4 2022 and 33.2 per cent in Q1 2023) of employed persons worked less than 40 hours per week in both quarters, noting that this was most common among women, individuals with lower levels of education, young people, and those living in rural areas.
It further indicated that the proportion of workers in wage employment in Q2 2023 was 12 per cent.
The ILO Deputy Director-General, Celeste Drake, said, “Countries must take action to counter the risk of declining labour income share. We need policies that promote an equitable distribution of economic benefits, including freedom of association, collective bargaining and effective labour administration, to achieve inclusive growth, and build a path to sustainable development for all.”
Drawing on the ILO’s recently published Global Employment Trends for Youth, the study also identified the large share of youth outside employment, education and training as a persistent area of concern.
According to GET Youth, the global rate of youths not in employment, education or training decreased slightly from 21.3% in 2015 to 20.4% in 2024 and is expected to remain stable for the next two years.
The female NEET rate, at 28.2% in 2024, was more than double that of young men, jeopardising SDG 8.
