The loss in working hours due to the coronavirus pandemic means 1.6 billion workers may lose their livelihoods.
Nearly half the world’s workers are at immediate risk of losing their jobs, the International Labour Organization (ILO) said on Wednesday.
The sobering statement will ring alarm bells in economies around the world, with every nation on the planet likely to be affected by the devastating fallout from the spread of coronavirus.
Some 1.6 billion workers in the informal economy – almost half of the global labour force, and those at the most vulnerable end of the employment ladder – are in danger of losing their livelihoods, said the ILO, the oldest agency of the United Nations, in its latest report.
“For millions of workers, no income means no food, no security and no future. Millions of businesses around the world are barely breathing,” said ILO Director-General Guy Ryder.
“They have no savings or access to credit. These are the real faces of the world of work. If we don’t help them now, they will simply perish.”
The “informal economy” accounts for jobs that are neither taxed nor monitored by governments, and that make up a huge proportion of developing economies. Some two-thirds of the world’s working people are employed in such “grey market” jobs.
‘Employment crisis’
The ILO’s latest assessment of the worldwide situation suggests the calamitous scale of the impact of the pandemic on jobs. Coronavirus has infected more than 3.1 million people globally, killed more than 226,000 and shut down several of the world’s most major economies.
“It shows I think in the starkest possible terms that the jobs employment crisis and all of its consequences is deepening by comparison with our estimates of three weeks ago,” Ryder told a briefing on Wednesday, Reuters reported.
The Trades Union Congress, a federation of trade unions in England and Wales, called for international action to protect workers.
“Hundreds of thousands of the most vulnerable workers are losing their jobs around the world every day. It’s vital they all have the support they need to make ends meet and are not thrown into poverty,” TUC General Secretary Frances O’Grady, told Al Jazeera in an emailed statement.
“A crisis on this scale needs a global response. We need coordinated international action to support health, protect jobs, give everyone access to social security and boost local and national economies when the recovery comes.”
‘Creative reconstruction’
But while the immediate impact makes for horrifying reading, the global economy will likely bounce back in one form or another – though how long that will take, and what the world will look like when it does, remain unclear.
The coronavirus pandemic is a “tipping point” in an ongoing labour market restructuring, in which the “creative destruction” will become a “creative reconstruction” as new jobs are created, said John Bryson, professor of enterprise and economic geography at the University of Birmingham.
“Those who are at risk or who have lost their livelihoods will eventually re-enter the labour market,” the veteran economist told Al Jazeera. “The bounce-back after COVID-19 will be gradual, but it will occur. Also we must remember that the global economy was already tipping towards a downturn before COVID-19; COVID-19 has just advanced a path-dependent outcome.”
He described the pandemic as a “cultural inflection point” that can fundamentally change the future.
“If we look back to 1990, one-third of the jobs that existed then have been destroyed over the [subsequent] 30 years. A radical employment revolution occurred. But, this was a gradual process with limited disruption. These destroyed jobs were replaced by new jobs related to the internet and the emergence of digitalisation.”
He pointed to the likely emergence of a “socially distanced economy”, in which jobs performed remotely would thrive, while technology drives the creation of millions of new roles and jobs.
But that may not come as much comfort to the world’s fruit-pickers and sewer cleaners facing their hours being cut in the coming weeks.
And the outlook for global poverty has suddenly become even more bleak than previously expected.
Impact on poverty
Earlier this month, campaigning NGO Oxfam published research suggesting millions more people were about to be forced into poverty.
“For the billions of workers in poor countries who were already scraping by – pulling rickshaws, picking tea or sewing clothes – there are no safety nets such as sick pay or government assistance,” said Danny Sriskandarajah, Oxfam GB chief executive.
It will be hard for many to feed and protect their families when incomes vanish.
Ana Caistor Arendar, head of inequality campaigns and policy at Oxfam, called for a bailout of developing countries.
“Today’s figures underline the fact that the world is facing an economic as well as a health crisis,” she told Al Jazeera.
“While some action on debt has been taken, much more is needed, starting with the cancellation of developing country debt payments for 2020. This could equip poorer nations with the resources they need to tackle the health social and economic consequences of this pandemic.
To give an example, cancelling Ghana’s external debt payments in 2020 would enable the government to give a cash grant of $20 a month to each of the country’s 16 million children, disabled and elderly people for a period of six months.”
It may not sound like much, but that amount could help stop the children of those laid off from starving to death.
The first month of the coronavirus crisis is estimated to have resulted in a drop of 60 percent in the income of the world’s two billion informal workers. The global workforce numbers around 3.3 billion, the ILO said.
The stats break down to show nosediving income for informal workers in Africa and the Americas – a fall of 81.6 percent – with incomes plummeting 70 percent in Europe and Central Asia, and dropping 21.6 percent in Asia and the Pacific regions.
Informal workers are the world’s most vulnerable, usually without welfare protections, and often without access to healthcare, or the ability to work from home.
Worldwide, more than 436 million businesses face serious disruption. These are operating in the worst-hit sectors, including 232 million in wholesale and retail, 111 million in manufacturing, 51 million in accommodation and food services, and 42 million in real estate and other business activities.
Hours worth 305 million jobs lost – in three months
The world’s number of hours worked in the second quarter of this year are expected to be 10.5 percent lower – equivalent to 305 million full-time jobs – than the last pre-crisis quarter, the ILO said.
“The eventual increase in global unemployment over 2020 will depend substantially on how the world economy fares in the second half of the year and how effectively policy measures will preserve existing jobs and boost labour demand once the recovery phase begins,” the ILO said.
The ILO urged governments to accelerate unemployment benefit payouts, give financial support to freelance workers, and fast track access to credit for small businesses.
“As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent,” Ryder added.
TUC chief O’Grady agreed. “As we move on from this crisis,” she said, “we must tackle the deep inequalities that force so many workers to live right on the edge.”
The magnitude of today’s challenge offers an opportunity to fundamentally reshape the world, said the University of Birmingham’s Bryson.
“Do we want to return to a society that devalues labour, relegating whole parts of the global population to a position of exploitation and disadvantage?” he asked. “Alternatively, do we want to return to our old economy, in which price determined value – rather than value determining price?”
– Al Jazeera News
