Covid-19 has cost global workers $3.7tn in lost earnings, says ILO
The economic blow from Covid-19 has cost workers around the world $3.7tn (£2.7tn) in lost earnings, after the pandemic wiped out four times the number of working hours lost in the 2008 financial crisis, according to the UN’s labour body.
The International Labour Organization (ILO) said women and younger workers had borne the brunt of job losses and reductions in hours, and warned that people in sectors hardest hit by the crisis – such as hospitality and retail – risked being left behind when the economy recovered.
Sounding the alarm that entrenched levels of inequality risked becoming a defining feature of the economic rebound from Covid-19, the Geneva-based agency said that governments around the world needed to take urgent action to support those at the heart of the storm.
In its annual analysis of the global jobs market, it said 8.8% of working hours were lost in 2020 relative to the end of 2019, equivalent to 255m fulltime jobs. This is approximately four times bigger than the toll on workers as a consequence of the 2008-2009 financial crisis.
These “massive losses” resulted in an 8.3% decline in global labour income, before government support measures are included, according to the ILO, equivalent to $3.7tn in earnings – about 4.4% of global GDP.
Women have been more affected than men by the disruption to the jobs market, with female workers more likely to drop out of work altogether and stop looking for a new job. Younger workers have also been particularly hard hit, either losing jobs, dropping out of the labour force or delaying the search for a first job.
The ILO said there were some encouraging signs of recovery at the start of 2021, with the Covid-19 vac
cine gradually being deployed around the world. However, it still estimated the continuing economic fallout would lead to a 3% loss of working hours globally in 2021 compared with the end of 2019, equivalent to 90m full-time jobs.
In a pessimistic scenario, which assumes slow progress on vaccination, working hours would fall by 4.6% this year, while on an optimistic path the world economy would still lose 1.3% of working hours. It said the outcome would depend on how well the pandemic was brought under control, and by how much consumer and business confidence recovered.
Guy Ryder, the director general of the ILO, said: “We are at a fork in the road. One path leads to an uneven, unsustainable, recovery with growing inequality and instability, and the prospect of more crises. The other focuses on a human-centred recovery for building back better, prioritising employment, income and social protection, workers’ rights and social dialogue. If we want a lasting, sustainable and inclusive recovery, this is the path policymakers must commit to.”