The International Labour Organization (ILO) published its flagship report titled, ‘World Employment and Social Outlook (WESO) 2021.’ The theme of the report was, ‘The role of digital labour platforms in transforming the world of work.’ As per the report, India is one of the fewer nations to have maximum numbers of online web-based platforms.
This article mentions the key findings of ILO’S World Employment and Social Outlook 2021. IAS Exam candidates can also find WESO 2020 key findings here.
Focus of World Employment and Social Outlook Report
The report by the ILO focuses on the following:
- To bring out a clear picture of global employment and social trends.
- To measure the underperformance of the labour market using the unemployment rate.
- To assess the full potential of the working-age population
- To evaluate the participation of the labour market in the economic growth of the countries
|What is the International Labour Organization?
It is a United Nations’ agency that focuses upon setting labour standards, developing policies and devising programmes to promote decent work among genders.
It was established in 1919 and has 187 member states.
Key Findings of the 2021 World Employment and Social Outlook
It is an annual report that summarizes the labour market performance around the world.
- Digital Labour Platforms
- 2010-2020 witnessed a five times increase in the numbers of digital labour platforms.
- The number of such platforms is concentrated in a few countries – the USA, India, UK, Ireland.
- Labour supply in digital labour platforms is more than the work demand.
- With the advent of the COVID-19 pandemic, the labour supply over these platforms has increased.
- The demand has decreased majorly the work is concerned with software development and technology.
- The outcome of more demand is seen on the downward pressure on earnings.
- The concentration of investment in digital labour platforms varies. Asia, North America and Europe have the largest concentration of investments (96 percent).
- Asia – 56 US Billion Dollar
- North America – 46 US Billion Dollar
- Europe – 12 US Billion Dollar
- In 2019, a total revenue worth 52 US Billion Dollars was generated by the digital labour platforms; 70 percent of which was concentrated in only 2 countries:
- The US – 49 percent
- China – 22 percent
- Four Key Elements of the business strategies adopted by the digital labour platforms:
- Revenue Strategy – Subscription plans, multiple fees to platform workers, clients, users etc.
- Recruitment and matching of workers with clients – Algorithms over human interaction. Ratings, Clients or customers’ reviews, cancellation rate, work acceptance and profile of workers are bring used through algorithms.
- Work Processes and Performance Management – Using algorithms, the entire process of work and performance of workers is being managed.
- Rules of platform governance – The digital platforms govern the platform workers, clients, users based on their terms of service agreements.
- Reliance over digital labour platforms is soaring
- Start ups and Fortune 500 companies both are increasingly relying on digital labour platforms.
- Location-based platforms have helped various businesses including Small and Medium Enterprises (SMEs).
- The number of men working on digital labour platforms is more than women. As per ILO surveys of workers on
online web-based and location-based (taxi and delivery) platforms; women represent only four in ten workers on online web-based platforms and one in ten workers on location-based platforms.
- Challenges to Businesses:
- Work arrangement management
- Risk of losing internal human resource capacity
- High commission fees
- Poor digital infrastructure
- Traditional business suffers a setback, particularly in the retail sector; due to competition given by large e-commerce companies. The other challenges met by tradition businesses are:
- Unfavourable contractual terms
- Non-transparency on the part of platforms (especially with regard
to data, rankings and pricing)
- Weak dispute resolution mechanisms
- Uneven playing field
- The difference in income by digital labour platforms between developed and developing countries exist:
- Half of the platform workers on online web-based platforms earn less (2.1 US Dollar per hour) than the average hourly earning (3.4 US Dollar in a week.
- Freelance platform workers in developing countries earn 60 percent less than those in developed countries.
- Earnings from app-based taxi and delivery sector business on online web-based platforms are more in developing countries.
- Lack of social security coverage to online platform workers.
- The classification of occupation found on online web-based platforms are:
- Software development and technology
- Creative and multimedia
- Writing and translation
- Clerical and data entry
- Sales and marketing support
- Professional services
India and WESO 2021
- Indian labours are the largest suppliers of global labours.
- India has witnessed exponential growth in the number of digital labour platforms.
- Online labour supply has increased.
- India witnesses 8 per cent increase in its online labour supply in 202o in comparison with 2018.
- Software development & technology, and creative and multimedia services are the occupation services where India saw an increase in online labour supply.
- The major setback is the women’s share of labour supply in the online web-based platforms. It is the least in India; at 21 percent. All major occupation services see the least share of women from India. The percentage of men and women labour supply between October 2020 and January 2021 in different occupations online is given below:
- Clerical and Data Entry
- Men – 80 percent
- Women – 20 percent
- Creative and Multimedia
- Men – 79 percent
- Women – 21 percent
- Professional Services
- Men – 68 percent
- Women – 32 percent
- Sales and Marketing
- Men – 81 percent
- Women – 19 percent
- Software and Technology
- Men – 84 percent
- Women – 16 percent
- Writing and Translation
- Men – 53 percent
- Women – 47 percent
- Clerical and Data Entry
- COVID impact on India’s online labour supply:
- India saw an increase in both online labour supply and demand.
- The demand for online labour supply came from occupational services like clerical and data entry, professional services, along with software development and technology
- The number of registered workers increased across all occupations except in professional services.
World Employment and Social Outlook Trend 2020 – Facts
The four key messages that the report highlighted:
- On the account of lower economic growth and lack of inclusive growth, lower-income countries face challenges to reduce poverty and working conditions.
- Major gaps in access to work are highlighted with the rate of total labour underutilization.
- Inadequacies in work quality especially in the informal sector.
- Substantial inequalities prevail in access to work and work quality among workers based on their geographical locations, sex and age.
Also read | Income Inequality in India
The WESO report mentions its findings in multiple aspects, a few of the important ones mentioned below:
- Rise in discontent with social, political, and economic situations – 7 out 11 subregions of the world saw an increase in the incidents of protests in 2019.
- Challenges to low-income countries;
- Gap between lower-income and middle-income countries has widened with a supporting fact that in 2018, the average GDP per capita across lower-income countries was 1700 US dollars.
- Also, the report mentioned that for the past 18 years, only 1.8 percent growth in average per capita has been witnessed in low income countries
- Way forward for low-income countries to boost their economic growth
- Structural transformation
- Technological upgrade
- Technological diversification
- 470 million people worldwide affected due to total labour underutilization:
- 188 million people were reported to be unemployed in 2019.
- 165 million people who are employed stated a wish to work for more paid hours.
- 120 million people were not classified as unemployed but are marginally attached to the labour market. (Such people are those who are not looking for a job while being available for work; or searching for a job but not getting one.)
- Way forward to come out of labour underutilization:
- Comprehensive policies regarding labour reforms
- Labour underutilization to be measured comprehensively along with the unemployment rate.
- Shortage of jobs in the near future
- The global unemployment rate was reported to be 5.4 percent in 2019.
- The report stated that the global unemployment rate will be near 5.4 percent only in 2020 and 2021 with no significant improvement.
- Decline of the unemployment rate has come to a halt due to economic slowdown (especially in the manufacturing sector); technological changes (which lead to mass job losses).
- High-income countries fare better than middle-income countries w.r.t unemployment
- Paid job does not guarantee decent working conditions
- People who are employed in the informal sector are paid little with no access to social protection and rights at work
- 2 billion people are informally employed and make 61 percent of the global workforce
- Workers living under the poverty
- Over 630 million workers across the globe (19 percent of employed workers) are living in extreme or moderate poverty.
- The target goal of sustainable development goals (SDGs) to eradicate poverty by 2030 is difficult to attain given workers’ poor conditions.
- Inequalities in the labour market
- Highest employment-population ratio is found in low-income countries.
- Africa has the highest unemployment rate (12%)
- The employment rate (59%) is higher in rural areas than in urban areas (56%); however, rural areas witness more time-related underemployment.
- On the account of technological innovations, there seems to be the increase in rural-urban disparities.
- Migration leads to disparities as the migrants don’t seem to access similar rights as the original inhabitants of the area where they migrate to. Geographical disparities in labour markets lead to more migration and subsequent inequality rise.
- Women and youth participation in the labour market
- In 2019, women labour force participation remained 27 percentage points below the male participation rate. Women participation in the labour force stood at 47 percent in comparison to 74 percent participation rate of male participation.
- Gender stereotyping remains a prevalent issue for lesser female participation in the labour market.
- 22 percent of the people in the age brackets of 15-24 are not in employment worldwide.
India’ Employment Status
As per the annual report 2019-20 of Ministry of Labour and Employment, a few important facts about the employment status of India are given below:
- There are 149.9 million women workers in India (Rural Areas – 121.9 million; Urban Areas – 28 million.)
- As per the survey report 2017-18 of NSSO, overall Worker population Ratio for women in the age group 15 & above was 22% and it was 23.7% in rural areas as compared to 18.2% in urban areas based on usual status (Principal status+subsidiary status) basis.
According to the annual employment and unemployment survey report 2013-14:
- The labour force participation rate in India stands at 52.5 percent.
- The unemployment rate stands at 4.9 percent at All India Level. 49.5 percent of people are reported to be self-employed and 30.9 percent as casual labour.
Aspirants can read more about unemployment in India in the linked article.
‘World Employment and Social Outlook’ is one of the important international organizations’ reports. Aspirants can use the findings of the report to support their answers in UPSC GS papers.