United Nations Forecasts 25 Million Job Losses Worldwide Due To Coronavirus
Nearly 25 million jobs could be lost worldwide due to the coronavirus pandemic, but an internationally coordinated policy response can help lower the impact on global unemployment, according to a United Nations agency.
In its preliminary assessment report titled "Covid-19 and world of work: Impacts and responses", the International Labour Organization 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.
The report said 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.
It also 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 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 2008-09 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, it said.
The note said that fall in employment also meant large income losses for workers estimated between $860 billion and $3.4 trillion by the end of 2020. This will translate into reduction 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 report said.
It estimates that 8.8-35 million additional people will be in working poverty worldwide, compared to the original estimate for 2020 which projected a decline of 14 million worldwide.
Underscoring the need for swift and coordinated policy responses, ILO Director-General Guy Ryder said "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."
"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," Ryder 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 too, who are vulnerable due to the lack of social protection and rights.
"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,” According to Ryder.
"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 said.