UN labour agency reports rise in global youth unemployment amid AI risks

The International Labour Organization published its Employment and Social Trends 2026 report on January 14, revealing that while the headline global unemployment rate is projected to hold steady at 4.9% in 2026, youth unemployment hit 12.4% in 2025. That’s roughly 2.5 times the overall rate, and the gap isn’t narrowing.

The NEET problem is bigger than the unemployment number

The more alarming figure isn’t youth unemployment itself. It’s the 260 million young people worldwide who are not in employment, education, or training, a group the ILO categorizes as NEET. That represents about 20% of the global youth population, meaning one in five young people is essentially sidelined from both the workforce and any pathway toward entering it.

In low-income countries, the situation is significantly worse. NEET rates average 27.9%, meaning nearly three in ten young people in those economies have no job and aren’t building skills toward getting one.

ILO Director-General Gilbert F. Houngbo didn’t mince words about the disconnect between the stable top-line numbers and the reality on the ground.

The resilient headline unemployment figures are misleading, masking significant deficits in decent work opportunities.

Houngbo called for coordinated efforts from governments, employers, and workers to leverage technology responsibly while promoting quality job opportunities, particularly for youth and women.

AI enters the equation, and not as a savior

The report flags artificial intelligence as a compounding risk factor for young job seekers. In advanced economies, where AI adoption is moving fastest, demand is intensifying for high-skilled roles. The ILO warns that the pace of adoption could outrun the ability of education systems and training programs to prepare young people for whatever comes next. Wages for young workers in high-skilled occupations could also face downward pressure as employers weigh human hires against AI-powered alternatives.

A follow-up report, the Global Employment Trends for Youth 2026, is scheduled for release on August 11, 2026, and is expected to dig deeper into these dynamics.

The broader labor picture isn’t exactly rosy either

Over 2.1 billion workers globally face informal employment, meaning they lack the protections, benefits, and stability associated with formal work arrangements.

Approximately 300 million people live in what the ILO defines as extreme working poverty, earning less than $3 per day.

Women represent only two-fifths of global employment and are 24% less likely than men to participate in the labor force at all.

The projected 186 million people who will be officially unemployed in 2026 is, in some ways, the least concerning number in the entire report. The much larger populations trapped in informal work, extreme poverty wages, or total disengagement from the labor market represent a more structural challenge that a cyclical uptick in hiring won’t fix.

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