ILO Says Mideast Crisis Could Erase 38M Jobs by 2027

(MENAFN) The escalating Middle East conflict is casting a long shadow over the world's workforce, threatening tens of millions of jobs and wiping trillions of dollars from global labor incomes, the International Labor Organization (ILO) cautioned Monday.

In a stark new report, the ILO outlined how ripple effects from the crisis — including soaring energy costs, fractured trade and transport corridors, strained supply chains, declining tourism, and tightening migration pathways — are already battering economies well beyond the conflict zone.

The numbers are alarming. Should oil prices climb roughly 50% above their early 2026 baseline, global working hours could contract by 0.5% this year and a sharper 1.1% in 2027 — losses equivalent to 14 million and 38 million full-time jobs, respectively. Real labor incomes could simultaneously erode by 1.1% in 2026 and 3% in 2027, translating into staggering global losses of approximately $1.1 trillion and $3 trillion.

ILO chief economist and report author Sangheon Lee warned the situation was hardening into "a slow-moving and potentially long-lasting shock" for workers across the globe.

Arab States, Asia-Pacific Bear the Heaviest Burden
The ILO flagged Arab States and Asia-Pacific nations as the most acutely exposed regions, given their deep dependence on Gulf energy flows, maritime trade routes, and labor migration networks.

Under a severe escalation scenario, working hours in Arab States could plunge by as much as 10.2% — surpassing the labor market damage recorded during the COVID-19 pandemic. Meanwhile, labor migration flows into Gulf nations have slowed significantly since hostilities intensified, and remittances reaching South and Southeast Asia are already showing early signs of deterioration.

The ILO urged governments to prioritize employment-centered crisis responses, calling for reinforced protections covering informal workers, migrants, refugees, and small enterprises.

The broader crisis traces back to February 28, when the US and Israel launched coordinated strikes against Iran, prompting retaliatory action from Tehran targeting Israel and US allies across the Gulf — and triggering the closure of the Strait of Hormuz, a chokepoint whose shutdown has severely disrupted global energy flows, particularly to Asian nations.

MENAFN19052026000045017169ID1111135822