Almost 25 million jobs could be lost worldwide as a result of Covid-19, according to a new assessment by the International Labour Organization (ILO).
An initial evaluation of the impact of the pandemic says the effects will be far-reaching, pushing millions of people into unemployment, underemployment and working poverty.
It is calling for a decisive and immediate response, noting that if there is “an internationally coordinated policy response, as happened in the global financial crisis of 2008/9, then the impact on global unemployment could be significantly lower.”
The United Nations agency wants to see urgent, large-scale and coordinated measures across three pillars: protecting workers in the workplace, stimulating the economy and employment, and supporting jobs and incomes.
These measures include extending social protection, supporting employment retention (such as short-time work, paid leave, other subsidies), and financial and tax relief, including for micro, small and medium-sized enterprises. In addition, the note proposes fiscal and monetary policy measures, and lending and financial support for specific economic sectors.
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By GlobalDataBased on different scenarios for the impact of Covid-19 on global GDP growth, ILO estimates indicate a rise in global unemployment of between 5.3m (“low” scenario) and 24.7m (“high” scenario) from a base level of 188m in 2019. By comparison, the 2008-9 global financial crisis increased global unemployment by 22m.
Underemployment is also expected to increase on a large scale, as the economic consequences of the virus outbreak translate into reductions in working hours and wages.
Self-employment in developing countries, which often serves to cushion the impact of changes, may not do so this time because of restrictions on the movement of people and goods.
Falls in employment also mean large income losses for workers. The study estimates these as being between US$860bn and US$3.4 trillion by the end of 2020. This will translate into falls in consumption of goods and services, in turn affecting the prospects for businesses and economies.
Working poverty is expected to increase significantly too, as “the strain on incomes resulting from the decline in economic activity will devastate workers close to or below the poverty line.”
The ILO estimates that between 8.8m and 35m additional people will be in working poverty worldwide, compared to the original estimate for 2020 (which projected a decline of 14m worldwide).
“This is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on people,” says ILO director-general Guy Ryder. “In 2008, the world presented a united front to address the consequences of the global financial crisis, and the worst was averted. We need that kind of leadership and resolve now.”
Groups likely to be disproportionately affected by the jobs crisis include people in less protected and low-paid jobs, women and migrants. The latter are vulnerable due to the lack of social protection and rights, and women tend to be over-represented in low-paid jobs and affected sectors.
“In times of crisis like the current one, we have two key tools that can help mitigate the damage and restore public confidence. Firstly, social dialogue, engaging with workers and employers and their representatives, is vital for building public trust and support for the measures that we need to overcome this crisis.
“Secondly, international labour standards provide a tried-and-trusted foundation for policy responses that focus on a recovery that is sustainable and equitable. Everything needs to be done to minimise the damage to people at this difficult time,” Ryder concludes.
