Underutilization and inequality are two key challenges facing laborers around the world, according to an International Labour Organization (ILO) report published Jan. 20.

An estimated 13% of the world’s labor force (470 million) is underutilized; this is more than twice as many people as reflected in the global unemployment rate.

Labor underutilization, as defined by the ILO, is a combination of three categories: time-related underemployment (unable to obtain the desired hours of work), unemployment and potential labor force (persons able to work but not seeking employment or job-seekers not able to work at the present time).

Of the roughly 470 million underutilized laborers, 119 million (25%) are categorized as potential labor, 188 million (40%) as unemployed and 165 million (35%) as facing time-related underemployment.

Labor force analyses must include more than employment-to-population ratios, the report emphasized, because these do not account for underemployment levels within the workforce.

“Low-income countries have the highest employment-to-population ratio (68 percent), as many vulnerable workers are forced to take up any job, regardless of its quality,” the report said. “Indeed, workers in these countries are also the most likely to experience bad working conditions and to live in poverty (the combined rate of extreme and moderate poverty being as high as 66 percent).”

Low-paying jobs are the reality for around 19% of employed persons worldwide (630 million) who do not earn enough to rise above the level of extreme-to-moderate poverty.

In addition, informal employment remains the most common form of work globally, with 61% of the labor force “engaged in economic activities that are either insufficiently covered, or not covered at all, by formal arrangements in law or in practice.”

Such informal laborers (around 2 billion worldwide) often work for low pay, in less safe working conditions, with fewer rights and protections and without access to social safety nets.

The percent of informal laborers is significantly higher in low-income (89.8%) and lower-middle-income (83.7%) nations than in upper-middle-income (52.6%) and high-income (18.3%) nations.

Wide disparities also exist between regions in both unemployment and time-related underemployment levels.

North Africa’s unemployment level (12%) is four times that of North America (4%), while Latin America’s (8%) and the Caribbean’s (13%) time-related underemployment levels are both multiple times higher than both North America and Europe (roughly 1% for both).

“For millions of ordinary people, it’s increasingly difficult to build better lives through work,” said ILO Director-General Guy Ryder in a press release announcing the report’s publication.

“Persisting and substantial work-related inequalities and exclusion are preventing them from finding decent work and better futures. That’s an extremely serious finding that has profound and worrying implications for social cohesion.”

The full report is available here.

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