Almost 25 million jobs across the world could be lost due to the economic and labor crisis created by the COVID-19 pandemic unless governments act swiftly together to protect workers, according to a new assessment by the International Labour Organization (ILO).
“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.
Initial estimates of the preliminary assessment note, COVID-19 and the world of work: Impacts and responses, point to a significant rise in unemployment and underemployment in the wake of the virus.
Based on different scenarios for the impact of COVID-19 on global GDP growth, the 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, said the assessment note released March 18.
Labor supply is declining because of quarantine measures and a fall in economic activity, ILO said. At this point, a preliminary estimate (up to 10 March) suggests that infected workers have already lost nearly 30,000 work months, with the consequent loss of income for unprotected workers.
Underemployment is also expected to increase massively as working hours and wages are reduced. 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$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.” The ILO estimates that between 8.8 million and 35 million additional people will be working in poverty worldwide, compared to the original estimate for 2020 (which projected a decline of 14 million worldwide).
The report 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-sized enterprises. In addition, the note proposes fiscal and monetary policy measures, and lending and financial support for specific economic sectors.