The Future of Work Podcast

Hello and welcome to the ILO Future of  Work podcast. The space 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 a brand new report from  the ILO. The report's message is clear. Global  

labour markets look stable, but that stability  hides deeper problems. What's 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?  

These are some of the central questions explored  in the Employment and Social Trends 2026 report.  

Stay with us as we unpack the report's  key findings, hear from leading experts,  

and explore what these insights mean for  workers, employers, and policy makers,  

and what leaders should be thinking about  next. Joining me today are Stefan Kühn,  

Senior economist in the Macroeconomic policy and  labour market trends unit and the lead author of  

the Employment and Social Trends 2026 report. and  Marva Corley, Senior economist and trade expert  

at the ILO. Welcome to you both and thank you for  being here. Thank you. Thank you. Stefan, let me  

start with you. The Employment and Social Trends  2026 report is being released at a time of deep  

changes and uncertainty. Can you walk us through  the core message of the report? The core message  

of the report is that despite those uncertainties  and large changes, global labour markets look  

stable. The global unemployment rate is projected  at 4.9% in 2026, the same as it has been since  

2023. That's quite remarkable. So the labour  markets in terms of employment creation

and also the economic growth show great resilience  in face of all of those uncertainties. But a  

second core message is that stable labour markets  are not necessarily healthy labour markets. There  

are major challenges underneath which need  to be addressed and where progress is too slow.  

Indeed, the report reveals that progress towards  decent job is stalling. What does this mean for  

social justice? Decent work is fundamental for  social justice, because it's about, it's  

not only about having employment but it's also  about having a decent income, having access to  

social protection and having rights at work.  And when progress is stalling, when we mean  

progress is stalling, it means that really  the key indicators such as informality and working  

poverty, that progress has slowed down markedly  over the past years compared to what we have  

seen before that. And just as an  example, so today we have 284 million workers  

who live in extreme poverty, meaning less than $3  per day. And because they just don't earn enough  

through work to get themselves out of poverty. And  in low-income countries, half of all workers are  

in extreme poverty. And the number of working  poor in low-income countries is rising because  

of the severe lack of progress in abolishing  working poverty. And that's just one example  

that really is a major problem for social  justice, becau se poverty does not equal social justice.

The report also talks about informality.  How widespread is informal work today?  

Globally 57.7% of workers are in informal employment.  Just to give a ballpark number, that's around 2.1  

billion workers. So it's the majority of workers  are informally employed. And as I said before   

the trend has stalled the improvements have  stalled and we have been looking underneath why  

the improvements have stalled and it's, a major  reason is that the transformation of economies  

towards more productive sectors with better  working conditions has slowed down markedly  

over the past decade, compared to what we have seen  in the past and that's problematic.

And another thing what we can also see is that progress within  sectors to improve informality is also very slow.

Another major theme is productivity.  Why is weak productivity growth such a concern for decent work?

There's a saying that productivity  is not everything but in the long run it's almost  

everything. Productivity growth is fundamental  to provide income growth. Without productivity  

growth, you cannot have income growth. But of  course, it's not the only thing. You also need  

the labour market institutions in place, that the  productivity growth will actually attribute to the  

workers, to the broader society and not just end  up in the pockets of a few people. But productivity  

growth is, we can see in the data, productivity  growth is fundamental to lower working poverty, to  

improve working conditions, to raise standards of  living across the board.

Let's talk about youth now.  

The report shows that young people continue  to struggle. Why are they still having such a  

hard time finding decent jobs? Young people are  struggling today, but they have always struggled  

in the past as well. Young people have limited  experience and therefore they have a harder time  

entering the labour market than people who are  already in the labour market. It's just  

hard to find your first job. So that's why they  have a higher unemployment rate. What we are very  

concerned about is not only the unemployment  rate but the share of youth not in employment,  

education and training which stands at one in  five youth who are that. So 260 million young  

people are not gaining valuable experience that  they need to succeed later in the labour market  

and that's really a major concern and the share  of youth not in employment, education or training  

so-called NEET it's also stabilizing so it's  not improving further even though, for example  

the Sustainable Development Goals were aiming  for a substantial reduction in the share of  

NEET and that's not happening.

We mentioned at  the beginning we are living at a time of deep  

technological changes. What's the impact of AI on  jobs?

Well, currently the impact of AI seems to be  

rather limited as we can also see with the stable  labour market situation. In the medium-term that  

might change a bit, but one also needs to see  that in the context of the demographic change.  

In high-income countries, we can already see now  that labour force growth is flat at zero, and the labour  

force is going to shrink in the future. So there might be a risk of running out of workers  

of having severe labour shortages. So AI could  help in in that sense, but the only question is  

whether we're going to run out of jobs or run  out of workers, but we don't really know that.  

In low-income countries, the situation is quite  different because there's a large number of young  

people entering the labour market who are unable  to find decent work and who are therefore stuck  

with low-quality employment. Another important  theme is gender gaps. Inequality still shapes  

who gets access to work.

Absolutely. Gender gaps  are a global phenomenon. We estimate that only two  

out of five workers are women, even though they  make up half of the population. But gender gaps  

are also quite regionally different, which depends  a lot on the social norm. So in some countries  

or in some regions gender gaps for instance in  terms of unemployment rates are very large. In  

other regions they are non-existent, showing that  there can be gender discrimination in terms of  

getting a job but it might also in other  regions is not the case. But the major problem,  

the major gender gap is in the access towards  the labour market, getting onto the labour market  

or being unable to do so.

You mentioned high  income countries and low-income countries.   

I wonder if you can talk a little bit more about the  the market situation and how these trends are  

divergent and what the impact of this can be  in the long term. In terms of unemployment rates,  

the trends globally are quite similar. Even  though there are some regions, for instance,  

in Latin America where we see somewhat decreasing  unemployment rates, while in other regions such as  

Northern America for instance, where there's  slightly increasing unemployment rates. But of  

course going beyond that, going beyond  unemployment rates the realities in the labour  

markets are fundamentally different across the  world, in terms of informality rates, working  

poverty, working conditions, the extent of  decent work, but also in terms of demographics.  

What's the labour force composition? Do we have  a lot of young people? Do we have a lot of older  

workers? Just another example in terms of when  we're talking about improvements in work quality.  

In Asia – so the major improvements in work quality  over the past decades have been driven by Asia,  

by China, now India, and that's still the  case. The continent is still responsible for  

the improvements in work quality. But the  improvements are slowing down. While in Africa,  

work quality is, well, is almost receding, because  of the large growth of the workforce and  

since Africa is increasing in its share  in the global labour force that has an impact  

on the global aggregates as well, which leads,  also contributes to the stagnation in global  

work quality progress.

Indeed, as you said earlier  stable labour markets are not necessarily  

healthy labour markets. I would like now to  bring Marva into the conversation. Marva,  

how are trade dynamics and global risks shaping  the employment outlook?

I think in short it's really about what the report finds

and a lot of what's underlying what Stefan said is really the  

issue of uncertainty. Macroeconomic certainty has  become a really key defining feature in the short  

term and trade policy uncertainty is a big part  of that. Trade policy uncertainty, it includes,  

you know, we can think about trade restrictions  is probably what's on everyone's mind, but also  

geopolitical tensions, conflicts, as well as any  sort of big disruptions on global supply chains.  

And this makes it, this uncertainty makes it  harder for firms to sort of plan, makes it harder  

for them to invest and hire workers. And this  has a large impact in terms of the labour market.  

Our analysis shows that when trade policy  uncertainty rises, even moderately, it can  

put downward pressure on wages across the board.  And the effects are really strongest in those  

economies with sort of deep integration in supply  chains. Think about, for example, Southeast Asia,  

Southern Asia, but also Europe and Central Asia  where real changes in terms of wages could fall  

between say almost a half a per cent per year.  And that might not seem like a lot, but if you  

look at it over time, it really is.

Let's talk a bit about trade. Why does trade still matter for job quality?

Trade matters for job qualities  in a number of ways. First, let me let me take  

a step back. I mean, the report not only looks  at short-term volatility in terms of trade,  

but it also looks at some longer term trends.  And if you allow me, I'd like to talk about a  

couple of those longerterm trends. One is that the  composition of trade has been changing. So, if you  

look at trade, we're moving to a world in terms of  more trade in services rather than trade in goods.  

And that has some implications in terms of the  types of jobs that are being created by trade.  

So we look now and we see that nearly half of the  jobs that are created by trade – that's 465 million  

jobs worldwide are created by trade. Half of those  jobs are actually linked to services. And this is  

particularly relevant for some regions more than  others. Not only are the type of jobs related  

to trade changing, but also trade patterns are  changing. So you have more trade between middle-  

income countries, for example, now than you do  between high-income countries. And this means a lot  

in terms of the types of jobs that are created  that are linked to trade regionally as opposed  

to those jobs that are linked to trade outside  the region. We see some movement towards trade  

like regionalization of trade and because some  regions are left out such as southern America,

you can think of Africa where most of trade takes  place outside the region, this has implications in  

terms of how these regions are able to get sort  of get a tow hold into global supply chains  

and impacts on job creation. Now in terms of the  quality of these jobs, we know that from findings  

outside the report and from our findings in the  report that jobs linked to trade tend to be better  

quality jobs than those jobs with less links to  trade. Particularly in lower income and middle  

income economies. They are better jobs in terms of  being in the formal sector. They're better jobs  

in terms of pay. They're better jobs in terms of  just having a formal employment relationship.  

And this is particularly important for some of  the trends that Stefan talked about: reducing  

informality, as well as increasing the number of  women and young people who get their first job  

in the labour market. In many low and middle-income  countries, these jobs tend to be in trade oriented  

sectors. So it has a potentially very important  impact for the types of jobs that are created.   

So we're seeing different patterns based on different  regions of the world.

What implications does that have for the future?

For the future, one  really has to think about with, like I said, this  

sort of change in patterns of trade towards  more service-oriented jobs – think about your  

market services, logistics, digitally delivered  services, business services. One has to think  

about what type of skills are needed for these  jobs. Are these the same type of skills that are  

needed for jobs more linked to the manufacturing  sector? And with these changing sort of patterns  

of trade across regions, one also has to think  about if those jobs that are being created are  

also decent and productive jobs. Are they jobs  that are able to provide a living wage? Are there  

jobs in terms of you know security, as well as, you  know, formal relationships? Are there jobs that  

give voice to workers? So I think these things  are very important to consider for the future.  

I would now like to bring both of you and put a  question to you. We have spoken about risks. So  

let's talk now about opportunities. What  opportunities do these changes we have  

been discussing create for improving living  standards?

As I mentioned while there are real risks,

these changes also open  up you can imagine some important opportunities  

for improving living standards for workers.  First of all, if you think about the shifts  

as I talked about, in trade patterns, it can  provide opportunities for countries to access  

new markets, to have entry points into new global  and regional supply chains. It also can create a  

space, and I think this is very important, sort of  rethink trade policy and the link to the labour  

market from the very beginning, learning from  some of the lessons of the past about how to  

make trade more important, how to bring in  workers who were left out, sort of, in the first  

wave of globalization. And I think there's some,  we see some evidence of that already  

happening. If you think about the way that trade  agreements are actually including more linkages to  

the labour markets in terms of labour provisions  that already incorporate labour standards,  

put emphasis on living wages and create space for  social dialogue between workers and employers.   

In the regional section for Europe and Central Asia,  the report looks at the implications of ageing for  

long-term viability of maintaining standards  of living in the context of shrinking labour  

forces and it shows that we need to accelerate  productivity growth quite dramatically. And here AI  

even though it could be a threat to many jobs  but it also holds the promise of enabling that  

productivity growth, of avoiding the labour, that  the labour shortages really become a major  

constraint for maintaining standards of living.  So that's clearly an opportunity, but it relies on  

that labour markets, the jobs that remain, remain  decent jobs that are not fundamentally transformed  

in that sense by AI, and also that the the benefits  of AI can attribute to society at large and not  

only to a few monopolized corporations.

And finally, from the ILO's perspective, what needs to happen next?  

The report calls for coordinated  action and stronger institutions to advance decent  

work and social justice. But in practical terms,  what does that look like?

We need to strengthen social dialogue,  

to get everyone together to  discuss what needs to be done to deal with  

the challenges of the future. I just want to give  you one example, there's a major concern right now  

that AI threatens entry- level jobs. So how do  young people gain the experience that they need  

in order to be able to productively work with  AI? Because today a lot of young people when they  

start jobs, they do, let's say more menial tasks, which  nevertheless give them important experience and  

enterprises just as workers and governments  have an interest to figure out okay how can  

we get workers to gather the experience that they  need to be productive workers with AI

when we are replacing the task we gave them before through AI.  

So there's a clear need for social dialogue to discuss such issues.

And if I could add to that,  I think it's really important for policy makers  

to think of issues that are related  to work, not only from a social perspective, but  

also from an economic perspective. When workers  have increased wages, when workers have security,  

when workers, you know, are able to work in  conditions of freedom, this increases their  

productivity. And these productivity benefits  have impacts way beyond social benefits. They  

have benefits in terms of improving firms'  profit and improving the overall economic  

resilience of societies. So I think that, you know,  advancing decent work and promoting decent work is  

actually the surefire way to improve economic  progress overall.

Indeed. And that's it for today's episode.

We've been speaking with Stefan  Kühn, author of the Employment and Social Trends  

2026 report, and Marva Corley, Senior researcher  and trade expert at the ILO. In the coming weeks,  

we'll continue exploring the forces reshaping the  world of work. Follow us on LinkedIn, YouTube,  

Instagram, and X, and now also on Blue Sky and  Threads under our official channels. For now,  

goodbye and see you very soon for another  episode of the ILO Future of Work podcast.