COVID-19 to increase unemployment rate
Besides hitting the economy hard, the coronavirus (COVID-19), still spreading like wildfire, is also going to deal the labour force a huge blow as the International Labour Organisation (ILO) projects that the virus could claim up to 24.7 million jobs, forcing a rise in unemployment scale.
According to the ILO, “The world of work is being profoundly affected by the global virus pandemic. In addition to the threat to public health, the economic and social disruption threatens the long-term livelihoods and wellbeing of millions.”
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,” according to a report.
This is fuelled majorly by the screeching halt global economies are experiencing, which has called for the need to restrict movement and reduce interactions to the most minimal level. Consequentially, the fall in employment rate will increase unemployment and underemployment.
The report also states that the decline in economic activity will increase working poverty projected to lie between 8.8 and 35 million additional people.
Similarly, the International Air Transport Association (IATA) has disclosed that Nigeria’s aviation industry will lose $434 million in revenue as well as over 22 thousand jobs, and over 2 million passengers as a result of the coronavirus.
The disease, which broke out in China, has affected over 40 countries leading to more than 12 thousand deaths. In addition, the impact of the virus has grown beyond a health calamity into a global economic and social mishap limiting growth and development.
“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,” said ILO director-general, Guy Ryder.
Analysts believe that due to the screeching halt in economic activities as well as possible low demand, companies revenue will be affected, which will lead to downsizing.
Akinloye Ayorinde, analyst at CSL Stockbrokers Limited, said the coronavirus, which has caused a slowdown in economic activities, would grow the unemployment rate as many companies would engage in layoffs.