Despite two decades of economic growth, Asia-Pacific still faces structural weaknesses in its labour markets, warns a new report published by the International Labour Organization (ILO).

Based on the most recent available data, the ILO’s report, entitled Asia-Pacific Employment and Social Outlook 2018: Advancing decent work for sustainable development (APESO)  sheds light on the labour market challenges facing the most populous region of the world.

According to the first edition of the APESO, although the regional unemployment rate is projected to remain at 4.1 per cent through 2020, the vulnerable employment rate is expected to creep up towards 49 per cent, reversing a downward trend of at least two decades.

While the Asia-Pacific region has made rapid progress to substantially reduce extreme poverty, one fourth of all workers in the region – 446 million workers – still lived in moderate or extreme poverty in 2017 and nearly half of the workforce – 930 million people – were still making a living in vulnerable employment as own-account or unpaid contributing family workers.

“High employment ratios and productivity gains in the region mask persistent and worrying decent work deficits. Many people, in particular in the region’s developing economies, still have no choice but to take jobs with poor working conditions that do not generate stable incomes nor safeguard them and their families against poverty in the longer term,” says Sara Elder, the lead author of the report and Head of the ILO Regional Economic and Social Analysis unit. “What is especially frustrating here is that despite the region’s important economic gains, there are still so many workers just barely getting by. Any household crisis – injury or death of a breadwinner, loss of job, natural disaster, crop failure, etc. – threatens to push them backwards into poverty.”

Facts and figures

• With 1.9 billion workers – 1.2 billion men and 700 million women, the Asia-Pacific region represented 60 per cent of the global workforce in 2017.
• Asia and the Pacific has the most people working, relative to the working-age population. Employment-to-population ratio stands at 59.7 per cent, compared with 58.6 per cent at the global level.
• More than two in three workers were in informal employment in 2016, which is closely linked to the 48.6 per cent of workers still in vulnerable categories of employment. The informal employment rate is particularly high in Southern Asia, where almost 88 per cent of workers were informally employed.
• Large numbers of workers in the region, especially those in low-paid jobs, work more than 48 hours per week. The average hours worked in Southern Asia and Eastern Asia in 2017 were the world’s highest, at 46.4 and 46.3 hours per week, respectively. In Eastern Asia, almost one in five workers worked in excess of 60 hours per week.
• The regional unemployment rate at 4.1 per cent is the world’s lowest and well below the global rate of 5.5 per cent in 2017. But while the global unemployment rate has held steady since 2015, the rate in the Asia-Pacific region has increased slightly by 0.1 percentage point. In total there were 80.9 million unemployed persons in Asia and the Pacific in 2018.
• At 10.4 per cent, the youth unemployment rate remained unchanged from 2015, while the global rate increased to 12.6 per cent. 35 per cent of the region’s unemployed were youth (aged 15–24), although youth made up only 20 per cent of the working-age population.
• The unemployment rate is highest among persons with secondary education, which would seem to confirm an increasing “hollowing out” of middle-skilled jobs in emerging economies, in part due to technological progress, with information and communications technology (ICT) lessening the demand for workers engaged in routine tasks.
• Gender inequality in the world of work remains an issue of primary concern. The male participation rate exceeded the female rate by 30 percentage points in 2017, a decrease of only 1 percentage point since 2000.
• Structural transformation has been strongly felt in the region, with employment moving from agriculture mainly into services and only to some extent into industry. Most of the loss in agriculture work was taken up by the increase in employment in the services sector, where 740 million jobs have been gained since 2000. Manufacturing jobs decreased slightly from the peak in the mid-2000s, with more job losses accruing to women than men.

Addressing the causes for concern

According to the report, recent threats of increased trade protectionism are already having an impact on investments in the manufacturing sector, which many workers in the region continue to rely on for their livelihoods and, for women, occasionally their first foray into paid employment.

The report also highlights that demographic trends, in particular the impact of ageing societies, are adding strain to the already-limited social protection systems and call into question future labour productivity gains. Meanwhile, ongoing adjustments to technological developments could prove disruptive to employment flows, especially for workers at the medium-skill level. Additionally, environmental degradation, exhaustion of natural resources and the increasing incidence of climate-related natural disasters add uncertainty to the region’s future growth trajectory.

“Strong records of economic growth in the Asia-Pacific region have benefited some, but too many are left behind,” says Tomoko Nishimoto, ILO Assistant Director General and Regional Director for Asia and the Pacific. “The remaining decent work deficits raise a serious alert on the region’s capacity to achieve the objectives agreed upon within the 2030 Agenda, in particular Goal 8 on inclusive and sustainable growth, employment and decent work for all.”

The report shows that the development pathways taken by most countries in the region have not been sufficient to overcome the decent work deficits. Where labour market governance is weak, decent work deficits continue to prevail, despite the region’s strong economic growth record.

A separate report looking at labour market policies in ASEAN countries (see box) reaches similar conclusions that are somewhat linked. The report notes that despite the progress made to expand the scope of labour market policies since the ASEAN Community was formed, there remain significant gaps both the countries’ policy portfolios and capacity to enforce labour market policies. The result is continued weak protection of the region’s most vulnerable workers.

“Most countries in the region are still uncomfortably distant from the decent work-related sustainable development targets. Action needs to be grander, bolder, smarter and faster if countries are to get themselves on track to keep their commitments. All countries stand to benefit from a strengthened focus on decent work as a driving mechanism for inclusive growth,” says ILO Regional Director Tomoko Nishimoto.

Policies for more and better jobs in the context of ASEAN economic integration

In a separate report- Labour Market Inventory ASEAN 2010-15: Labour market policy in an age of increasing economic integration, the ILO Research Department, in cooperation with the OECD Development Centre and the support of the Swiss State Secretariat for Economic Affairs (SECO), analysed policy responses of ASEAN member States to the structural shifts in the economy and labour markets in the region.

The study found that the majority of the 500 policies identified in the ILO Labour Market Inventory II database, were aimed at improving skills development, strengthening workers' rights (including through anti-discrimination rules and occupational safety and health regulations), and expanding the coverage of social protection policies.

Still, the study finds that significant policy gaps remain. In particular, very few policies targeted the rights of those most vulnerable in the labour market, including migrants, minorities and informal workers. There are also still too few policies in ASEAN countries on unemployment benefits, minimum wages and collective bargaining. In many instances, progress made in labour market policies were promoted through ASEAN-level initiatives and declarations, thus demonstrating the decisive role that the ASEAN Community can play in promoting decent work and advancing social justice for all.