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As unemployment remains near record lows, the World Economic Forum highlights how technology, demographics, and economic shifts are creating uneven labour market realities worldwide.
Recent reports by the Organisation for Economic Co-operation and Development (OECD) have shown that that unemployment rates remain historically low in many higher-income economies, with April’s rate stable at 4.9%.
As highlighted by the World Economic Forum (WEF) recently, this figure has hovered at or below 5% for three years. Yet behind these numbers, different regions are telling very different stories.
Mexico recorded a low unemployment rate of 2.6% in July. South Africa, however, faces ongoing challenges, with its latest quarterly labour force survey showing a 32.9% jobless rate. In the UK, hiring has slowed, even as annual wage growth holds at around 5%. Japan maintains ultra-low unemployment at 2.5%, but workers are grappling with a sixth consecutive month of real wage declines.
Brazil has seen unemployment fall to 5.8% in Q2 2025, the lowest since records began in 2012, with wages hitting record highs. Meanwhile, the United States reports steady unemployment at 4.2%, though wage growth has cooled, according to the Bureau of Labor Statistics.
These differences were said to shed light on how the post-pandemic recovery is progressing unevenly, influenced by local demographics, economic conditions, and policy environments.
The forces reshaping jobs and skills
According to the WEF's Future of Jobs Report 2025, several global trends are driving this divergence. Ageing populations in higher-income economies are creating labour shortages, while younger populations in lower-income regions are increasing competition for jobs.
Technology, particularly AI, is transforming work by automating tasks and boosting demand for big data and cybersecurity skills. At the same time, rising living costs and slower growth are placing pressure on wages and hiring decisions, which makes adaptability and resilience highly valued in the workplace.
The green transition is also creating new roles in renewable energy, electric vehicles, and environmental management while reshaping traditional industries. Geopolitical shifts in trade and industrial policies are pushing businesses to rethink supply chains, fuelling demand for expertise in security, logistics, and risk management.
Remote and flexible work remain priorities for many workers, reshaping how people engage in the labour market.
Looking beyond unemployment: The participation gap
Headline unemployment figures only tell part of the story. Labour force participation rates show who has left the workforce altogether, and in several regions, this has become a growing concern.
In the US, participation has decreased to 62.2% as immigration policy shifts and retirements shrink the available pool of workers. By contrast, New Zealand continues to record a higher participation rate of 70.5%, though this has reduced slightly as unemployment increase.
For employers, weak participation alongside low unemployment signals a smaller talent pool and greater risk of skills shortages. For policymakers, the focus turns to addressing barriers that keep women, young people, and older workers on the sidelines.
How businesses are adapting
Employers are already making adjustments in response to this uncertain environment. The recently published Chief People Officers Outlook – September 2025 shows that 42% of leaders expect turbulence to continue into next year. Many organisations are postponing hiring or restructuring while preparing for longer-term transformation.
The outlook highlights three immediate priorities for the year ahead:
- Redesigning roles to integrate AI
- Strengthening workplace culture to retain talent
- Ensuring technology is deployed responsibly
[Read HRO's coverage on the report here]
Further global labour news reported
As noted by the WEF, the International Labour Organization (ILO) may face further cuts, with the US proposing a US$107mn funding reduction. This follows the loss of 225 jobs earlier this year.
In the UK, more than 2.7mn workers, representing almost 11% of the workforce, are now on a four-day week. Employers report higher motivation, better recruitment, and cost savings as key benefits.
Globally, more than 2.4bn workers are already experiencing the effects of extreme heat, with productivity falling by 2-3% for every degree above 20°C, according to data from the World Health Organization and the World Meteorological Organization.
Meanwhile, in China, youth unemployment remains above 14%. A new trend has seen young adults paying to use “mock offices”, where they clock in to job hunt, build skills, and even maintain appearances for parents and schools.
As affirmed, labour markets in 2025 cannot be summed up by unemployment figures alone. Wages, participation, demographics, and technology are combining to create uneven realities across regions and sectors. For employers and policymakers, the challenge lies in bridging these divides while preparing workforces for a future that is increasingly digital, green, and global.
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