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25 mn jobs could be lost worldwide due to COVID-19: ILO

24
Mar '20
Pic: Shutterstock
Pic: Shutterstock
The economic and labour crisis created by the COVID-19 pandemic could increase global unemployment by almost 25 million, according to a new assessment by the International Labour Organisation (ILO). However, an internationally coordinated policy response could significantly reduce the impact on global unemployment, it said in a recent statement.

The preliminary assessment note, titled ‘COVID-19 and the world of work: impacts and responses’, calls for 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 (i.e. short-time work, paid leave, other subsidies), and financial and tax relief, including for micro, small and medium enterprises. In addition, the note proposes fiscal and monetary policy measures, and lending and financial support for specific economic sectors.

Based on different scenarios for the impact of COVID-19 on global gross domestic product (GDP) growth, ILO estimates indicate a rise in global unemployment of between 5.3 million (low scenario) and 24.7 million (high scenario) from a base level of 188 million in 2019. By comparison, the 2008-9 global financial crisis increased global unemployment by 22 million.

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, the assessment says.

Falls in employment also mean large income losses for workers. The study estimates these as being between $860 billion and $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”. ILO estimates that between 8.8 and 35 million additional people will be in working poverty worldwide, compared to the original estimate for 2020 (which projected a decline of 14 million 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,” said 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,” he added.

The ILO note warns that certain groups will be disproportionately affected by the jobs crisis, which could increase inequality. These include people in less protected and low-paid jobs, particularly youth and older workers and women and migrants as well. 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.

Fibre2Fashion News Desk (DS)


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