A new wave of investment is required in education, health and care to create a healthier labour market, tackle social mobility and support the post-pandemic world economy, the World Economic Forum has argued.
The WEF’s Jobs for Tomorrow white paper, co-authored with researchers from Accenture and coinciding with the annual Davos conference, states that the current faltering global labour market is characterised by lower labour-force participation rates, higher job insecurity and stagnating real wages, even as some economies have vast numbers of unfilled jobs.
While much of the job discussions at Davos centred on the need for upskilling to meet the needs of technological change, the WEP’s paper focuses on more traditional social roles, without which the wider labour market cannot function.
It argues that “labour-market scarring risks becoming permanent with many who left the workforce unlikely to return without new opportunities and working conditions.” Total hours worked globally in 2022 remain below pre-pandemic levels and will lead to a deficit of 52m full time jobs in 2022-23 the paper argues.
Investments aimed at re-routing economies to improve social outcomes will drive employment across both advanced and developing economies, the paper states, partly by improving social mobility, which has been eroded because of under-resourcing of social infrastructure.
There will be a global shortfall of 14.5 million healthcare workers, with a huge knock-on effect on economies and the overall labour market”
The white paper looks at the potential returns of investment in broadly defined “social jobs” that would create a “triple win” by boosting economic activity, expanding employment opportunities and generating multiplier effects in the form of more inclusive economies and societies.
It warns that by 2030 there will be a global shortfall of 14.5 million healthcare workers, with a huge knock-on effect on economies and the overall labour market. In addition, 69 million teachers will need to be recruited to achieve global education targets and reduce class sizes so that new technologies can be taught and the individual needs of students better addressed.
Childcare was another area where recruitment was required with 40% of parents not having access to services. Where childcare did exist, in developing countries, it was too costly to access for the average household, again having a negative effect on the wider labour market.
The paper pointed out that, as one recent analysis has revealed, most jobs performed in 2018 in the US did not exist in 1940 and close to 60% of jobs done in 2018 had not yet been “invented” in 1940. From this it followed that the social jobs of tomorrow will look very different to those of today. Augmented with technology and improved skills, they have the potential to lift living standards for both workers and those receiving social job services.
The importance of the social sectors in advanced economies was demonstrated by the fact that the five largest employment sectors include education (8.9%) and medical and healthcare services (8.4%) while care and social services are the eighth largest proportion of the workforce and form an additional 5.6% of jobs.
It concluded that as economies recovered, “investment in human capital and technology in social jobs in developed and developing countries alike will be critical for ensuring higher standards, certifications, wages and returns for individuals and for society, and have the potential to transform outcomes in health, wellbeing and social mobility as well as creating jobs and economic growth”.
Applied to the US economy such investments would deliver growth in GDP and additional job creation in the period up to 2030. Every dollar of investment would deliver a multiplier effect of 2.3 times the initial investment. Modelling had shown that a $1.3 trillion investment resulting in a $ 3.1 trillion GDP return would also create 10 million additional jobs in the social sector and close to 1 million in other sectors, totalling 11 million jobs to be created by 2030.