There is a great deal of uncertainty surrounding the future of employment, and making the wrong wagers could have disastrous effects on individuals and, eventually, entire countries. To make educated decisions regarding education, skill development, and career paths, it is essential to understand the forces influencing the global labour market as societies and economies navigate this complex landscape.
The recent “World Employment and Social Outlook: Trends 2025” report from the International Labour Organisation paints a bleak picture of the global labour market. While the unemployment rate has remained steady at 5%, this figure does not reflect the stark differences between regions and demographic groups. For example, youth unemployment stands at a concerning 12%, highlighting the difficulties faced by those just entering the workforce.
The job market situation is becoming even more dire due to economic challenges. Global growth slowed to 3.2% in 2024 from 3.6% in 2022, and this slowdown is expected to continue. For employers and job seekers, the downshift, geopolitical unrest, and growing trade protectionism are creating a perfect storm of uncertainty.
Although technological advancement is often hailed as the key to economic growth, it brings both benefits and drawbacks. With 60% of employers expecting to be affected by the digital revolution by 2030, it is predicted to be the most important trend. However, the uneven distribution of the benefits of this boom only exacerbates existing disparities.
The need to invest in digital infrastructure and education has never been more urgent in the Arab world, where there are significant variations in digital readiness. In fact, nations worldwide that are unable to close the digital divide risk falling behind in the competition for talent and innovation.
A ray of hope amidst the uncertainty comes from the global transition to a greener economy. With employment in the renewable energy sector expected to reach 16.2 million in 2023, this sector has experienced remarkable growth. This shift presents the Middle East’s resource-rich nations with an opportunity to diversify their economies and create long-term employment.
However, as demonstrated by the concentration of green jobs in some regions (46% of them are in China), the promise of equitable opportunity distribution worldwide remains a distant goal. Arab countries must, therefore, fully leverage their inherent advantages, such as their wealth of solar resources, to position themselves as pioneers in the green economy.
The increasing gap between employers’ demands and workers’ skills is one of the most pressing issues facing the labour market today. The rapid pace of technological change is rendering many traditional skill sets obsolete, creating a growing need for new, often highly specialised professionals.
For the majority of the previous century, STEM fields—science, technology, engineering, and mathematics—were prioritised over the arts. However, many STEM graduates are now finding that their jobs are being automated before they have had a chance to reconsider their career choices. With tasks that once took weeks of coding now completed in minutes, many people are left questioning how they can contribute.
A recent report in The Wall Street Journal noted: “Nearly one in four US tech jobs posted so far this year are seeking employees with artificial intelligence skills, job listings data show, as companies in nearly every corner of the economy adjust their recruiting pipelines to embrace the technology.”
Education systems are struggling to keep up with these changes, especially in developing nations. As a result, there is a growing mismatch in skills that could force millions of workers into unemployment. Addressing this issue is crucial to utilising what remains of the demographic dividend in the Arab world, where youth unemployment rates are among the highest globally.
Lastly, despite decades of progress, notable gender disparities in labour force participation persist. Women continue to participate at a significantly lower rate than men, especially in low-income nations. This gender gap represents not only a social injustice but also a massive economic opportunity cost.
The underrepresentation of women in some STEM fields may be attributed to more than just discrimination, according to recent research.
According to The Wall Street Journal article, “Sex differences in the STEM workforce may largely be a product of sex differences in interests and priorities. Talented students of both sexes tend to avoid a career in math or science if they can pursue something else.”
On the positive side, a comeback is possible, even though market forces haven’t been able to address the low compensation for care work, which is largely performed by women. In other words, even though AI may soon surpass humans in the majority of STEM tasks, it is unlikely to replace occupations that require the human touch that women typically provide.
As we look to the future, it is clear that the nature of work is changing. The gig economy, the growth of remote work, and AI-driven automation are all influencing traditional employment models. Future workers must possess the agility and lifelong learning skills necessary to handle multiple career changes.
The challenge for legislators and academic institutions is to create mechanisms that facilitate this flexibility. To achieve this, education must shift from rigid, degree-based models to more adaptable strategies that promote lifelong learning and skill development.
By understanding labour market trends and making strategic investments in sustainable industries, education, and technology, nations can position themselves to dominate the future economy.
These opportunities are especially appealing to the Arab world, which has a youthful, vibrant population and is increasingly focused on economic diversification. Arab nations can strive to create a future-proof job market by embracing the green energy transition, adopting digital transformation, and fostering an innovative and entrepreneurial culture.
The versatility and resilience of the human spirit are the safest bets in a time when the employment future appears too uncertain to make poor choices. Policies that are bold and progressive, like those implemented by the UAE and Saudi Arabia, can prepare workers for both today’s jobs and tomorrow’s careers.
Moreover, with the addition of 143,000 jobs in January, instead of the projected 175,000, the jobs report was weaker than expected. Nonetheless, upward revisions for the previous two months, totalling 100,000 jobs, confirm that the US labour market remains stable.
According to the household survey, the unemployment rate decreased slightly from 4.1% to 4%. As for consumers, real wage growth continues, with average hourly wages rising by 4.1% annually. It’s worth observing how job growth is concentrated. In January, 93,000 new jobs were created in the government and healthcare sectors, while more cyclical industries like manufacturing and construction saw only 7,000 new jobs in January and 73,000 over the previous 12 months.
Meanwhile, particularly for H-1Bs, the American labour market is becoming a nightmare. Many report being harmed by the difficult economy, so if you’re hoping for sponsorship, you should be ready with backup plans. H-1B workers and recruiters claim that US companies are currently halting the hiring of foreign talent. You have very little chance of landing a good job unless you’re an expert in a highly technical field.
According to one disgruntled applicant, they applied to more than 1,000 jobs in five months without receiving any responses. This is due to the abundance of qualified applicants and the fact that businesses are giving preference to local talent. Once a lifeline for those hoping to obtain an H-1B visa, entry-level positions are now nearly non-existent. Even those fortunate enough to secure interviews are frequently turned down later in the hiring process.
The reality is that no H-1B worker or applicant will be satisfied with a basic engineering degree anymore. To find a sponsor, you must specialise in fields like cybersecurity or artificial intelligence. Making strong connections is another key to realising the American dream. Since the job market is competitive for local workers as well, you will need all your contacts and referrals to succeed in today’s economy.