Context: Inequality is on the rise as the share of labour income has stagnated worldwide and a large share of youth remain out of employment, education, or training, according to the International Labour Organisation’s (ILO) World Employment and Social Outlook. A major reason for this fall in labour income, according to the report, is artificial intelligence or AI.
Key findings of the report
- Rising inequality: Inequality is increasing globally as the share of labour income has stagnated, while a significant portion of youth remains out of employment, education, or training.
- Impact of AI and technological innovations: The rise of artificial intelligence (AI) and other technological innovations over the past two decades has boosted productivity but reduced labour income shares. Automation-based technologies have been a key driver of this trend.
- Decline in global labour income share: From 2019 to 2022, the global labour income share dropped by 0.6 percentage points, adding to a long-term downward trend. The decline was particularly pronounced during the COVID-19 pandemic.
- COVID-19 exacerbated inequalities: The pandemic contributed to nearly 40% of the reduction in labour income share between 2020 and 2022, further concentrating capital income among the wealthiest and hindering progress toward SDG 10 (reducing inequality).
Countries 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.
About the World Employment and Social Outlook Report:
- It is a flagship publication of the International Labour Organization (ILO).
- It provides a comprehensive analysis of global labour market trends, challenges, and opportunities.
- The report offers valuable insights into various aspects of employment, including global labour market trends, regional disparities, social protection, youth employment, gender equality and impact of the informal economy on labour market dynamics.