The report “Employment and Social Trends 2026” prepared by the Department of Macroeconomic Policy and Jobs of the ILO Research Department reveals an interesting phenomenon about how the labor market changes in a stable economic situation. At first glance, the global economic system appears to be functioning with remarkable stability. Looking ahead to 2026, the global unemployment rate is projected to remain at a historically low 4.9%.
In the traditional lexicon of twentieth-century economics, this would be hailed as a triumph. However, this “resilience” is a mathematical mask—a mirage that obscures a deepening crisis of job quality and social equity.
While the headline figures suggest stability, the ground reality for billions is defined by “decent work deficits”. We are currently operating in a climate of “high uncertainty”, where economic and trade policy volatility has effectively frozen the progress of the last two decades. The resilience we see is not the resilience of flourishing markets, but a stagnant equilibrium where the momentum for better working conditions has ground to a halt.
For half a century, the social contract of the developed world was anchored in a single, unwavering promise: an advanced education is your shield against economic obsolescence. Generative Artificial Intelligence (AI) has not just dented this shield; it is arguably melting it down.
We are witnessing a startling paradox where workers with advanced education in high-income countries face higher automation risks than their less-educated peers. This is particularly acute for the 15-24 age demographic. Young graduates, who traditionally used “entry-level” roles as a springboard into high-skilled careers, now find those very roles being automated. This is more than a labor market shift; it is the death of the traditional meritocratic contract. In high-income economies, the specific occupational structures—built on information processing and cognitive routine—are precisely the territories AI is now colonizing. The “educational shield” has become a target.
The most harrowing evidence of our stalled progress is found in the depths of working poverty. Globally, 284 million workers still live on less than US$3 a day. The “crawling pace” of progress here is staggering: while extreme working poverty declined by 15 percentage points in the decade prior to 2015, that progress has plummeted to a mere 3.1 percentage point decline over the last ten years.
Even more disturbing is the geographical divergence of this suffering. While the global aggregate suggests slow improvement, the share of extreme working poor in low-income countries actually rose by 0.8 percentage points between 2015 and 2025. This data shatters the illusion that growth at the top eventually secures dignity at the bottom. “Relying on economic growth alone is insufficient to deliver meaningful progress in decent work.” — Gilbert F. Houngbo, ILO Director-General.
The global labor market is trapped in a two-speed demographic crisis that further distorts our understanding of “resilience”. In high-income countries, the labor force is shrinking and ageing. This creates a “mirage” of stability: the 4.9% unemployment rate is maintained not by a surge in job creation, but by a structural decline in the number of available workers as the population retires.
Conversely, low-income countries are home to a massive cohort of young people. This should be a “demographic dividend”—a surge of human potential to drive GDP. Instead, it is a missed opportunity. Weak productivity growth in these regions means the economy cannot absorb this talent into quality roles, leaving a generation of young workers with high expectations and no viable path to the middle class.
Perhaps the greatest roadblock to global social justice is the “informality trap”, now ensnaring 2.1 billion workers—57.7% of the global workforce. These individuals exist in the economic shadows, devoid of social protection, workplace safety, or legal recourse. Worryingly, global informality is trending upward due to a “composition effect”. Global employment is currently growing fastest in Africa and Southern Asia—the very regions where informality is already the norm. As the center of gravity for the global workforce shifts toward these regions, the aggregate quality of work declines. This structural shift acts as an anchor, dragging down global standards even as individual nations attempt to modernize.
Trade, once the primary ladder for developing nations, has become a source of profound volatility. Trade policy uncertainty (TPU) is now a direct tax on the worker’s wallet. ILO modelling indicates that moderate increases in TPU reduce real wages for both skilled and unskilled labor. The impact is geographically surgical: income losses reach up to 0.45% in South-Eastern Asia and 0.3% in Europe and Southern Asia.
While digitally delivered services offer a rare growth spot—now reaching 14.5% of global exports—the broader ability to fix these labor market fractures is being choked by an “invisible hand”: rising sovereign debt. Global public debt is projected to surpass 100% of global GDP by 2029. The growing debt burden limits governments’ financial resources, which in turn restricts their ability to invest in education, social protection, and the "social justice" programs needed to reduce the gap in decent work.
The evidence suggests that GDP growth has become an ineffective tool, unable to create a future of dignity for the majority.
A “resilient” economy that permits working poverty to rise in its most vulnerable regions while high-skilled graduates face automation is not a successful economy; it is a stagnant one.
True resilience requires a paradigm shift that moves beyond raw production toward the deliberate reduction of work deficits. We must move from data to action, acknowledging that if the most educated are now the most exposed, and the most resilient economies are the most stagnant, the old rules no longer apply. Are we prepared for a world where the traditional path to success has become a dead end, and the “invisible hand” of debt is the only thing left guiding our fiscal future?
Consequently, Uzbekistan's policy must shift toward a strategy that combines education reform with the changing labor market, focusing on the creation of high-quality, formal, and promising jobs rather than relying solely on economic growth measures.
The government must, in particular, align higher education and vocational training with prevailing trends of digitalization and automation, prioritizing the development of non-routine, analytical, and technological competencies, while simultaneously taking measures to mitigate the informal economy and expand social protection. This course of action is justified by the fact that traditional education does not guarantee employment security, that shortcomings in job quality persist despite stable macroeconomic indicators, and that without targeted intervention, Uzbekistan risks underutilizing its demographic potential and facing similar stagnation dynamics observed globally.
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
