The impact of the Middle East war on jobs: A crisis that transcends borders
Amidst the ongoing escalation, the impact of the Middle East war on employment as one of the most serious economic repercussions facing the world today. The International Labour Organization (ILO), a UN agency, has warned that the conflict in the Middle East is not only causing human casualties and physical destruction, but is also undermining wages and working conditions, even in areas outside the immediate geographical scope of the conflict.
The historical and economic context of the crises in the region
Historically, the Middle East has been a key hub for the global economy, given its strategic location and vast energy reserves. Past crises, such as the oil price shocks of the 1970s and successive geopolitical tensions, have demonstrated that any conflict in this region immediately impacts energy markets and global supply chains. Today, the scenario is repeating itself in an even more complex form; economies are more interconnected than ever before, making the impact of current shocks more widespread and profound, threatening the stability of international labor markets and economic growth rates.
In numbers: Huge losses in jobs and wages
A recent report by the International Labour Organization's chief economist, Sang-Hyun Lee, paints a bleak picture for the global economy. According to the data, the conflict will lead to the loss of millions of jobs and a sharp decline in real wages during 2026 and 2027. Factors putting pressure on the global economy include:
- The continuous rise in energy and fuel costs.
- Widespread disruptions to maritime transport and supply chains.
- The noticeable decline in the regional and international tourism sector.
- The size of the migrant workforce has shrunk due to security and economic concerns.
The report indicated that if oil prices rise 50% above their pre-crisis average, global working hours will decrease by 0.5% in 2026 and by 1.1% in 2027. This translates to the loss of approximately 14 million full-time jobs this year, rising to a staggering 43 million jobs next year. Global unemployment rates will also increase by 0.1 percentage points in 2026 and by 0.5 percentage points the following year, with real wages falling by 1.1% this year and by 3% in 2027.
Regional and international impact: Who bears the greatest burden?
The International Labour Organization (ILO) explained that the repercussions will not be uniform, with the Middle East, the Gulf States, and the Asia-Pacific region being the most affected. The organization warned that this crisis could have economic consequences for labor markets that may be worse than those the world experienced during the COVID-19 pandemic.
The migrant labor crisis and remittances
Migrant workers in Arab countries bear the brunt of this crisis. According to the report, approximately 40% of jobs in the region are concentrated in sectors considered high-risk and highly vulnerable to fluctuations, such as construction, manufacturing, transportation, trade, and services. The organization warned that the Gulf states' reduced reliance on migrant labor from South and Southeast Asia will severely impact the vital remittances upon which these developing economies heavily depend, potentially triggering local economic crises.
A long-term shock is reshaping labor markets
In concluding the report, economist Sanghyun Lee emphasized that the current crisis is more than just a temporary disruption. He stated, “Besides its heavy human cost, the Middle East crisis is not a short-term disturbance, but a slow-developing shock that could be long-lasting and will gradually reshape labor markets.” This warning places a significant responsibility on governments and policymakers to devise flexible economic policies capable of absorbing these shocks and protecting the most vulnerable working classes.
