The International Labour Organisation (ILO) has warned that the ongoing crisis in the Middle East could drive global unemployment higher over the next two years, with workers across multiple regions likely to face job losses and declining incomes.
In its report, Employment and Social Trends: May 2026 Update, the ILO projected that global unemployment would rise by 0.1 percentage points in 2026 and by a further 0.5 percentage points in 2027.
The organisation attributed the projected increase to disruptions in energy markets, transport systems, supply chains, tourism, and migration flows linked to the conflict.
“Global unemployment is expected to rise gradually, increasing by 0.1 percentage points in 2026 and 0.5 percentage points in 2027 as the Middle East crisis weighs on labour markets,” the report stated.
The ILO noted that the economic fallout was already extending beyond the region, with rising energy costs and supply chain pressures reducing working hours and earnings in several parts of the world.
According to the report, under a scenario in which oil prices rise by 50 per cent above early 2026 levels, global working hours could decline by 0.5 per cent in 2026 and by 1.1 per cent in 2027.
The organisation said this would amount to the equivalent of 14 million and 38 million full-time jobs lost respectively. It added that “real labour incomes are expected to decline by 1.1 per cent and 3 per cent ($1.1 trillion and $3 trillion), respectively.”
The ILO identified the Arab States and the Asia-Pacific region as the most exposed due to their dependence on Gulf energy supplies, trade routes, and migrant labour.
“Beyond its human toll, the Middle East crisis is not a short-lived disruption. It is a slow-moving and potentially long-lasting shock that will gradually reshape labour markets,” said Sangheon Lee, Chief Economist at the ILO and author of the report.
Lee added, “The world of work is one of the main channels through which global shocks become human shocks. What begins as an external shock eventually reaches workers and enterprises and can leave deeper scars by weakening the conditions that make work decent, secure and protected.”
The report also warned that migration and remittance flows could come under increasing pressure.
“If the crisis disrupts both deployments and remittance flows, the effects could spread to consumption, poverty and local employment in countries of origin,” the report stated.
The organisation said it would continue monitoring the impact of the crisis on global labour markets as additional data emerge.
