ILO warns Middle East labor risks

The International Labour Organization said on May 18 that the Middle East crisis is becoming a broader labour-market shock, with migrant workers, remittance-dependent economies and workers in exposed sectors facing rising risks to jobs, incomes and working conditions. The Geneva-based agency said the effects are moving through higher energy costs, disrupted transport routes, supply-chain pressure, weaker tourism, investment uncertainty, migration constraints and remittance strains. The ILO’s warning came in its Employment and Social Trends: May 2026 Update, released after an embargoed media briefing led by Chief Economist Sangheon Lee. The agency said the scale and duration of the damage will depend on how the crisis evolves. ### How does the ILO say this reaches workers far from the conflict? The ILO said the crisis is no longer confined to countries directly involved. In its May 18 report, the agency said higher oil prices and disruptions to trade routes, supply chains, tourism and migration are transmitting the shock into labour markets worldwide. Sangheon Lee said the shock was “slow-moving and potentially long-lasting” and would “gradually reshape labour markets.” Lee said the world of work is one of the main channels through which global shocks become human shocks, because pressure first hits enterprises and then reaches workers through weaker income, security and labour protections. (ilo.org) ### What is the headline economic risk in the report? (ilo.org) Under a scenario in which oil prices rise about 50% above their early-2026 average, the ILO said global working hours could fall 0.5% in 2026 and 1.1% in 2027. The agency said that would equal 14 million and 38 million full-time equivalent jobs, respectively. Real labour income could decline 1.1% in 2026 and 3% in 2027, the ILO said, equivalent to losses of about $1.1 trillion and $3 trillion. (ilo.org) Global unemployment would rise more gradually, by 0.1 percentage point in 2026 and 0.5 percentage point in 2027, or about 5 million and 20 million additional unemployed people. The ILO’s technical note said those figures are scenario-based simulations, not forecasts. (ilo.org) The methodology models the labour-market effects of an exogenous oil-price shock and uses that as a proxy for the current crisis. ### Why are migrant workers singled out? The ILO said migrant workers are likely to absorb a disproportionate share of the adjustment. (ilo.org) In Gulf Cooperation Council countries, the agency said its estimates show that for every 1% decline in employment among nationals during crises, employment among non-nationals falls by 4%. (ilo.org) The ILO has separately said many migrant workers in the Arab States are concentrated in lower-income and lower-skilled jobs, including construction, hospitality and domestic work, and often face decent-work deficits even before a crisis. That leaves workers more exposed when employers cut hours, reduce hiring or weaken protections. ### Which regions and sectors does the ILO flag as most exposed? (ilo.org) The Arab States are the most directly exposed, the ILO said, because of conflict disruption, displacement, damage to economic activity, energy and trade shocks, and pressure on migrant workers and refugees. Asia and the Pacific also stand out because of their links to Gulf energy flows, trade routes, supply chains and labour migration. (ilo.org) Around 40% of employment in the Arab States is in high-exposure sectors, the ILO said, including trade, construction, manufacturing, agriculture, transport, and accommodation and food services. In Asia and the Pacific, about 22% of workers are in high-exposure sectors, while tourism-dependent economies face added pressure. (ilo.org) ### What does the report say about remittances and labour protections? The ILO said remittance-dependent economies are vulnerable because any drop in migrant employment can quickly reduce household income in origin countries. The agency’s news release said pressure is growing on migrant workers and remittance-dependent economies as the shock spreads. The report’s policy message was that governments’ responses have begun but remain uneven and constrained by limited fiscal space. (ilo.org) The ILO said stronger attention to jobs, incomes and business resilience is needed to stop a temporary energy shock from becoming a longer setback for decent work. (ilo.org) The next formal ILO milestone is the International Labour Conference in Geneva from June 1 to June 12, according to the organization’s homepage. The May 2026 update, the news release and the technical note are already available on the ILO website. (ilo.org 1) (ilo.org 2)