It's time to retire the global unemployment metric and replace it with a different one: the percentage of people with great jobs. Why? The current global unemployment rate fails to capture the people who may technically be employed, but are not working in jobs that raise their living standards or their country's economic productivity.
"Unemployment" has been the world's scorecard for a healthy jobs market for a long time. If unemployment is low, the job market is strong, and so is the economy. If it is high, leaders get thrown out of office. But in truth, unemployment doesn't tell us much about a country's prosperity or economic growth. At best, the current metric gives us an incomplete picture.
According to the International Labour Organization, global unemployment is 5% -- the lowest level in decades. That translates to about 172 million people who aren't working. This figure feels low when you consider other numbers: Hunger affects more than 800 million people; extreme poverty affects 740 million; and illiteracy affects 775 million.
Of the more than 7 billion people on Earth, about 5 billion are adults. Remove students, homemakers, retired people, and those who aren't working but aren't looking for work -- and you have the "global workforce." That's over 3 billion people. The "unemployed" are those who are not working but are looking for work. That is how the ILO arrives at 5%.
The problem lies in how the self-employed are counted. Imagine a person in El Salvador who sells souvenirs on the street and doesn't make enough money to afford food or shelter. If this person works, they are considered employed.
Half of the self-employed -- or nearly 378 million people -- live on less than $2 a day. When you add them to the technically unemployed, and the part-time workers who want full-time jobs (about 430 million), "real" unemployment affects 32% of the global workforce -- not 5%. If that were the world's statistic, almost 1.7 billion people would be "unemployed."
But simply reclassifying people won't help policymakers. We need a metric that incorporates the quality of people's jobs -- not just whether they work 30 hours and get a paycheck.
This metric is what Gallup is releasing today in its third snapshot of global employment. The report looks at the percentage of people who have 1) "good jobs" -- the 1.5 billion people who work 30 hours a week for an employer -- and 2) "great jobs," those who are engaged at work.
Great jobs are identified by employees' responses to the 12 questions Gallup uses to measure engagement. These include ratings for statements like, "At work, someone encourages my development" and "I have the opportunity to do what I do best each day." Tested in over 160 countries, these items have also been validated against traditional economic indicators, such as productivity and profit.
Using this metric, Gallup finds that only 5% of the world has a great job.
The global unemployment metric holds leaders accountable at the lowest common denominator for jobs. The message is, "Let's get the number of people with no work to the lowest percentage possible." Instead, we should say, "Let's get the number of people with great jobs to the highest percentage possible."
Now that we know the score, let's do just that -- get the number of people with great jobs to the highest percentage possible.