As the circular economy has the potential to create employment opportunities for people from all backgrounds, it can help to create social cohesion and reduce inequalities. However, just as we cannot assume that the quality of jobs in the circular economy are better than in the current economic system, we cannot assume that the circular economy will be inclusive and create positive work opportunities for everyone. The circular economy is labour and technologically intensive, with the potential to create a diverse range of jobs and tasks that open up opportunities for people currently distant from the labour market. At the same time, the transition to the circular economy will lead to shifts in global and local supply chains and job losses in declining sectors. There is uncertainty about additional losses and potential gains due to automation. Circular economy models and policies developed in one context will not be universal. For the circular transition to be a just transition, pathways need to be underpinned by social dialogue, education, social protection, and context-specific regional support. In failing to do so, we risk not only leaving people behind, but also having efforts towards positive change resisted or prevented by communities most affected by the transition as they seek to protect their livelihoods.
Despite increases in employment in many countries, underemployment remains an issue around the world, particularly for young people in lower income countries. For young people not in education, employment or training, and other groups who experience barriers in accessing the labour market, longer periods out of work are associated with increasing risks of social exclusion and mental health issues.
To date, many active labour market policies have not been successful in achieving long-lasting change, pointing to deep seated structural and social issues that prevent certain people from entering or remaining in decent work. As well as creating barriers to formal work, levels of poverty and the state of social welfare systems within countries can incentivise people to take up informal work, often leaving them with less rights and protection. The diversity of workplaces remains an issue in many countries, calling for continued effort in challenging typical gender roles and discrimination by race or ability.