Covid-19 Crisis May Push 40 Crore Indian Workers Into Poverty, Says UN

About 400 million people working in the informal economy in India are at risk of falling deeper into poverty due to the coronavirus crisis which is having “catastrophic consequences”, and is expected to wipe out 195 million full-time jobs or 6.7 percent of working hours globally in the second quarter of this year, the United Nation’s labour body has warned.

The International Labour Organization in its report titled ‘ILO Monitor 2nd edition: COVID-19 and the world of work’, describes coronavirus pandemic as “the worst global crisis since World War II”.

“Workers and businesses are facing catastrophe, in both developed and developing economies. We have to move fast, decisively, and together. The right, urgent, measures, could make the difference between survival and collapse,” ILO Director-General Guy Ryder said on Tuesday.

Worldwide, two billion people work in the informal sector (mostly in emerging and developing economies) and are particularly at risk, the report said, adding that the Covid-19 crisis is already affecting tens of millions of informal workers.

“In India, Nigeria and Brazil, the number of workers in the informal economy affected by the lockdown and other containment measures is substantial,” ILO said.

"In India, with a share of almost 90 percent of people working in the informal economy, about 400 million workers in the informal economy are at risk of falling deeper into poverty during the crisis. Current lockdown measures in India, which are at the high end of the University of Oxford's Covid-19 Government Response Stringency Index, have impacted these workers significantly, forcing many of them to return to rural areas," it said.

The report said the disruption to the world's economies caused by the Covid-19 pandemic is expected to wipe out 6.7 percent of working hours globally in the second quarter of this year the equivalent of 195 million jobs worldwide.

"This is the greatest test for international cooperation in more than 75 years. If one country fails, then we all fail. We must find solutions that help all segments of our global society, particularly those that are most vulnerable or least able to help themselves," said Ryder.

"The choices we make today will directly affect the way this crisis unfolds and so the lives of billions of people. With the right measures we can limit its impact and the scars it leaves. We must aim to build back better so that our new systems are safer, fairer and more sustainable than those that allowed this crisis to happen," he said.

Large reductions are foreseen in the Arab States (8.1 percent, equivalent to 5 million full-time workers), Europe (7.8 percent, or 12 million full-time workers) and Asia and the Pacific (7.2 percent, 125 million full-time workers), it said.

Huge losses are expected across different income groups but especially in upper-middle income countries (7.0 percent, 100 million full-time workers), far exceeding the effects of the 2008-9 financial crisis, the report warned.

"The Covid-19 pandemic is having a catastrophic effect on working hours and earnings, globally," it said.

The agency said sectors most at risk include accommodation and food services, manufacturing, retail, and business and administrative activities.

The eventual increase in global unemployment during 2020 will depend substantially on future developments and policy measures. There is a high risk that the end-of-year figure will be significantly higher than the initial ILO projection of 25 million, it said.

More than four out of five people (81 percent) in the global workforce of 3.3 billion are currently affected by full or partial workplace closures, it said.

According to the report, 1.25 billion workers are employed in the sectors identified as being at high risk of "drastic and devastating" increases in layoffs and reductions in wages and working hours. Many are in low-paid, low-skilled jobs, where a sudden loss of income is devastating.

Looked at regionally, the proportion of workers in these "at risk" sectors varies from 43 percent in the Americas to 26 percent in Africa.

Some regions, particularly Africa, have higher levels of informality, which combined with a lack of social protection, high population density and weak capacity, pose severe health and economic challenges for governments, the report cautions.

Large-scale, integrated, policy measures were needed, focusing on four pillars: supporting enterprises, employment and incomes; stimulating the economy and jobs; protecting workers in the workplace; and, using social dialogue between government, workers and employers to find solutions, the study says.