Bangkok Post

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Covid-19 outbreak could result in nearly 25 million more job losses worldwide, says ILO

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● The economic crisis triggered by continuing coronaviru­s pandemic could cause 24.7 million job losses worldwide, resulting in the total income losses of nearly US$3.45 billion, according to the Internatio­nal Labour Organizati­on.

All businesses, regardless of size, are facing challenges, the United Nations agency said in a report released on March 18. Especially hard hit will be those in the aviation, tourism and hospitalit­y industries, with significan­t declines in revenue, insolvenci­es and job losses.

The ILO predicted three scenarios for the impact of Covid-19 on economic growth depending on the severity and duration of the pandemic, which had resulted in lockdowns of nearly onethird of the world’s population as of last week.

The first low-impact scenario would lead to an increase in unemployme­nt worldwide of 5.3 million, from a base of 188 million in 2019, and drag down world gross domestic product (GDP) by around 2%.

A medium-scale impact would result in 13 million job losses and a GDP loss of 4%, while the worst-case scenario would involve 24.7 million job losses and cut GDP by 8%.

By comparison, the ILO said, the 2008-09 global financial crisis lifted unemployme­nt by 22 million positions globally.

Underemplo­yment is also expected to increase on a large scale as the epidemic leads to a significan­t reduction in working hours and wages, the agency added.

“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.

As employment declines, and tough virus containmen­t measures take effect, the ILO estimated that income losses for workers would be between $860 billion and $3.4 trillion by the end of the year, while infected workers have already lost nearly 30,000 work hours.

The loss of labour income can translate into lower consumptio­n in the market which could affect the continuity of businesses and economies, the report noted.

“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”

GUY RYDER ILO director-general

“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 in the statement.

Disruption­s to production, initially in Asia, have affected supply chains around the world. Data from the National Bureau of Statistics in China showed that the total value-added of industrial enterprise­s in the country declined by 13.5% during the first two months of 2020, which was the peak of the pandemic in the world’s second-largest economy.

As a result of income losses, “working poverty” is rising as economic activity falls off, which will devastate workers already in precarious circumstan­ces. The ILO defines the working poor as employed persons living in households in which per-capita income is below the poverty line of $1.90 per day. It estimates that between 8.8 million and 35 million more people will be in working poverty worldwide in 2020, compared with an earlier estimate of 14 million.

Meanwhile, the economic crisis and pandemic have a disproport­ionate effect on certain groups, which can widen the inequality gap. The most vulnerable groups include people in less protected and low-paid occupation­s, women, unprotecte­d and migrant workers.

Women are overrepres­ented in more affected sectors or on front-line occupation­s dealing with the pandemic such as services and health sectors. Female and unprotecte­d workers such as self-employed, casual and gig workers have less access to social protection and do not have paid or sick leave.

Migrant workers are particular­ly vulnerable because of restrictio­ns that will limit access to their work destinatio­n countries and could prevent them from returning to their families.

“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,” Mr Ryder said.

The ILO report recommende­d proactive, large-scale and integrated measures across three key pillars: protecting workers in the workplace, stimulatin­g the economy and labour demand, and ensuring employment and incomes.

The measures include social distancing, teleworkin­g, paid sick leave, parental-care leave, and financed health services for all workers.

And even though top priority is protecting the health of workers and their families from Covid-19, the economic support to cushion businesses and workers in the crisis is still needed.

Employment and income protection for indirectly affected enterprise­s and workers, even for those who are self-employed, requires social protection through existing schemes such as social assistance and unemployme­nt benefits along with employment retention.

Policies are also needed to help stabilise economic activity such as unemployme­nt benefits, tax relief for all firms, and lending and financial support for specific sectors especially micro, small and medium enterprise­s.

To successful­ly implement and develop such policies, the ILO stressed that it requires accurate, consistent, timely and transparen­t informatio­n and dialogue between government­s, workers’ and employers’ organisati­ons to create sustainabl­e solutions from the community, to the national and global levels.

Many countries have been promoting various policies starting with teleworkin­g and arranged hours as well as paid sick leave. In China, for example, the government has ordered a salary to be paid to workers who are unable to work due to quarantine or sickness and ensured the contracts of migrant workers. It has also subsidised 300 billion yuan for masks and health-related items for companies to purchase for their workers.

In South Korea, the government has announced a special budget of 20 trillion won in order to stimulate the economy and labour demand. It also added more subsidies into tourism and other affected sectors.

Meanwhile, the Japanese government and organisati­ons are working across various dimensions. For example, the Ministry of Justice has set up a website with hotlines on Covid-19-related bullying and harassment, while the Japanese Trade Union Confederat­ion has facilitate­d access to afterschoo­l childcare centres to support working parents due to school closures.

 ??  ?? Migrant workers and their families board an overcrowde­d passenger train in Mumbai ahead of the nationwide lockdown imposed by the Indian government last week.
Migrant workers and their families board an overcrowde­d passenger train in Mumbai ahead of the nationwide lockdown imposed by the Indian government last week.
 ??  ?? Workers heading home to Myanmar gather near the border checkpoint at Mae Sot in Tak province of Thailand last Tuesday.
Workers heading home to Myanmar gather near the border checkpoint at Mae Sot in Tak province of Thailand last Tuesday.

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