ILO Chief Calls for Decent Work and Social Justice at Core of Global Policy

In a powerful appeal to international financial leaders, Gilbert F. Houngbo, Director-General of the International Labour Organization (ILO), has called for decent work and social justice to be placed at the centre of global economic policymaking. Addressing the World Bank Group and International Monetary Fund (IMF) Annual Meetings in Washington D.C., Houngbo urged governments, financial institutions, and multilateral actors to align fiscal and monetary policies with inclusive labour and social goals.

In written statements submitted to the meetings, Houngbo emphasized that robust labour institutions, fair wages, and comprehensive social protection systems are critical to confronting rising geopolitical tensions, trade disruptions, and technological shifts that are reshaping global labour markets.

"As uncertainty in the global economy persists with shifting geopolitical tensions and trade disruptions, the importance of building institutions that foster decent work for all could hardly be more critical," said Houngbo.

Progress Amid Persistent Challenges

The ILO chief noted that there have been significant global advances over the past two decades. Inequality between countries has declined, driven by rapid economic growth in emerging economies, and more than half of the world's population now benefits from some form of social protection.

However, Houngbo cautioned that these achievements are under threat due to enduring structural challenges, including sluggish productivity growth, income disparities, and the continued dominance of informal employment, which prevents millions from accessing decent work conditions or social safety nets.

The ILO's latest global outlook forecasts global employment growth of just 1.5 per cent in 2025, translating to 53 million new jobs — a decline from earlier projections of 60 million. Around 84 million workers, primarily in Asia and the Pacific, are expected to face increased risks due to trade volatility and geopolitical uncertainty.

At the same time, informal employment remains alarmingly high, encompassing 58 per cent of the global workforce in 2024, up from pre-pandemic levels.

"These trends underscore ongoing challenges in translating economic growth into formal economy and decent employment opportunities," Houngbo said.

Declining Labour Income Share Despite Rising Productivity

The ILO's analysis shows that while global output per worker increased by nearly 18 per cent between 2014 and 2024, workers' share of income in the global economy fell from 53 per cent to 52.4 per cent during the same period.

"Had the labour income share remained at its 2014 level, global labour income would have been US$1 trillion higher in 2024, and each worker would have earned an additional US$290 on average," Houngbo noted.

This decline, he explained, reflects a growing disconnect between productivity and wage growth, as technological advances and capital accumulation have not translated into proportionate benefits for workers.

Houngbo reiterated that minimum wage systems, collective bargaining, and social dialogue between employers and workers are key policy tools to reverse wage stagnation and reduce inequality.

"Fair wages and collective agreements are not obstacles to growth; they are the foundations of social cohesion and sustainable development," he stressed.

Generative AI: A Double-Edged Sword for the Future of Work

Houngbo also addressed the transformative and potentially disruptive role of generative artificial intelligence (AI), which he described as one of the defining labour challenges of the next decade. According to ILO estimates, nearly one in four workers globally could see their jobs significantly transformed by AI technologies, with women disproportionately affected due to occupational segmentation and gaps in digital skills.

"Whether AI adoption ultimately leads to job losses or complementarity depends on how technology is integrated, management decisions, and—fundamentally—the role of social dialogue in shaping implementation," Houngbo said.

He warned that without effective regulation, reskilling policies, and inclusive governance frameworks, AI could exacerbate inequalities, erode job security, and deepen divides between high- and low-skilled workers.

In response, the ILO is calling for governments and international institutions to adopt a "human-centred approach" to digital transformation, ensuring that technological innovation promotes decent work, safeguards rights, and expands opportunities.

A Renewed Social Contract for a Fragmented World

In his concluding remarks, Houngbo urged global leaders to pursue a renewed social contract, underpinned by democratic governance, inclusive policy dialogue, and people-centred institutions.

"The real challenge is not an inherent conflict between economic and social objectives," he said, "but the need to take coordinated action that transforms this potential dilemma into a dynamic, mutually reinforcing synergy."

He argued that a modernized social contract—anchored in fairness, participation, and respect for human dignity—offers both the institutional foundation and political legitimacy needed to sustain economic and social progress in an increasingly polarized world.

ILO's Call to Global Financial Institutions

Houngbo's intervention comes at a time when the World Bank Group and IMF are under mounting pressure to reform global financial governance and expand their support for social investment. The ILO has long advocated for "social conditionality"—ensuring that lending and fiscal support are linked to measurable improvements in employment quality, social protection, and gender equality.

He called on financial leaders to:

• Integrate decent work and social protection into macroeconomic policy frameworks.

• Support countries in building resilient labour institutions capable of withstanding shocks.

• Invest in the care economy, which has vast potential for job creation and gender equality.

• Expand financing for social protection floors, ensuring universal access to essential services.

By embedding these priorities into fiscal and monetary policy design, Houngbo said, the international community can transform global recovery efforts into long-term pathways for shared prosperity and resilience.

Building an Economy of Dignity

The ILO chief's message resonates amid growing concerns that the global economy is recovering unevenly from the combined impacts of the pandemic, conflict, and inflation. Many developing countries continue to face rising debt burdens and limited fiscal space, undermining their ability to invest in social protection or job creation.

Houngbo emphasized that decent work is not only a moral imperative but also an economic necessity, fostering stability, productivity, and consumer confidence.

"Decent work is the foundation of economic security, and social justice is the basis of global peace," he concluded. "Our shared prosperity depends on policies that put people—and their rights—at the heart of the global economy."