World Grapples with unemployment, numbers exceed Great Depression
The International Labour Organisation rightly pointed out that the COVID-19 pandemic has exposed the fragilities of our economies.
No country has been spared the impact of this pandemic. Even those countries who have been lucky enough not to record any positive cases are also suffering. They do not exist in a silo, and they depend heavily on trade from other countries.
Unemployment has become a major issue worldwide. In the US, state servers crashed trying to log all the unemployment benefit claims. In three weeks, 17 million Americans filed initial claims for unemployment insurance.
Stephanie Aaronson Vice President and Director - Economic Studies Senior Fellow and Francisca Alba Senior Research Assistant – Economic Studies at American Non-Profit Organisation Brookings reveal that this figure means that in America, unemployment rate is already above 15 per cent which is —well above the rate at the height of the Great Recession.
The human dimensions of the COVID-19 pandemic reach far beyond the critical health response. All aspects of our future will be affected – economic, social and developmental.
Need for social dialogue
International Labour Organisation (ILO) Director-General Guy Ryder said that from workplaces, to enterprises, to national and global economies, getting the response to this pandemic right is predicated on social dialogue between governments and those on the front line – the employers and workers. So that the 2020s don’t become a re-run of the 1930s.
In America alone, the ILO estimates are that as many as 25 million people could become unemployed, with a loss of workers’ income of as much as US$3.4 trillion (FJ$ 7.73tr).
This was before they made a further assessment of the situation and revealed frightening figures.
According to the agency, the latest dire assessment reflects the full or partial lockdown measures affecting almost 2.7 billion workers – four in five of the world’s workforce. Global unemployment already at 190 million
Speaking in Geneva via videoconference last week, Mr Ryder noted that at the start of the year – before COVID-19 spread worldwide – global unemployment already stood at around 190 million.
With the additional shock of the virus, it was “obvious” that the world of work is suffering an “absolutely extraordinary fall” because of the effects of the pandemic and the measures taken to deal with it, he added.
Although all regions of the world are suffering from the fallout of COVID-19, Arab States and Europe have seen the worst impact on employment in percentage terms.
The biggest losses numerically are in Asia-Pacific States, the most populous region of the world.
Overall, for the second quarter of 2020 – from April to June – ILO believes that working hours are likely to decline by 6.7 per cent.
All areas of the world and all workers affected
“No matter where in the world or in which sector, the crisis is having a dramatic impact on the world’s workforce”.
What policy responses need
“Policy responses need to focus on providing immediate relief to workers and enterprises in order to protect livelihoods and economically viable businesses, particularly in hard-hit sectors and developing countries.” An additional concern is the fact that in low and middle-income countries, the worst-hit industries and services have a high proportion of low-wage workers in informal employment.
World Economic Forum also has bleak outlook.
“Global Value Chains are undergoing profound changes, with important implications for the manufacturing and production ecosystem.
“In 2019, we developed a framework to anticipate the ongoing reconfiguration of Global Value Chains and derive key imperatives for businesses and policy makers. “The emergence of COVID-19 is accelerating the change of global value delivery models, with unprecedented consequences for manufactures and supply chains. Mitigating the impact of COVID-19 on manufacturers and supply chains requires both new approaches and new forms of collaboration to increase overall resilience.”