U.S. unemployment will decline this year to 5.9 percent and will fall further in subsequent years, providing a rare bright spot in the world’s job picture, the International Labor Organization said in a report to be released Tuesday.
Worldwide, however, the number of unemployed people will rise by 3 million during the year and continue to rise through at least 2019, when an estimated 212 million will be without work across the globe, said Guy Ryder, ILO director general.
By comparison, ILO labor economists forecast the U.S. unemployment rate to continue downwards to 5.5 percent in 2016 and 5.2 the following year.
Ryder credited Obama administration policies as having had “a positive influence on the labor market.”
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Ryder, a British national, cautioned, however, that the decline in the U.S. unemployment rate has been accompanied by “a very heavy fall in participation rates,” a reference to people who’ve stopped looking for work. “The participation rate has gone down from 66 percent to 62.5 percent” since the 2008 financial crisis.
Experts attribute the falls in participation levels to a combination of factors: increases in retirement, discouraged workers dropping out of the job market, disability, and students staying longer in school. ILO officials said estimates of the number of people who’ve left the U.S. job market because they were discouraged vary from 300,000 to 500,000, of an estimated 4.5 million who are no longer looking for work.
The agency, however, said it still expected relatively low wage growth in the United States. “You would expect if unemployment in the U.S. is now so low, wages should have moved much faster,” said Ekkehard Ernst, head of the ILO’s job friendly macroeconomic policies unit. “This gives you another indication that the problems in the U.S. labor market are not yet solved.”
In its “World Employment and Social Outlook Trends 2015” report, the ILO also said:
-- Around 74 million young people aged 15-24 were unemployed in 2014, with the global youth unemployment rate at 13 percent
-- Wages have increased more slowly than productivity, and the wage gap is growing, with the world’s richest 10 percent earning 30 to 40 percent of total income while the poorest 10 percent earn 2 percent of total income
--The global middle class has continued to increase largely due to progress made by emerging countries where it now accounts for 34 percent of total employment.