The COVID-19 pandemic could gut more than 25 million jobs worldwide and send global economies into a freefall if governments do not band together to act quickly, the International Labour Organization (ILO) said Wednesday.
“However, if we see an internationally coordinated policy response, as happened in the global financial crisis of 2008/9, then the impact on global unemployment could be significantly lower,” the United Nations agency said.
In a preliminary assessment note, the ILO called for “urgent, large-scale and coordinated measures” across three key pillars: protecting workers in the workplace, stimulating the economy and employment, and supporting jobs and incomes.
These measures, the organization said, must include extending social protection, supporting employment retention through short-term work, paid leave and other subsidies, and providing lending and tax relief for micro, small and medium-sized enterprises.
Based on different scenarios for the impact of COVID-19 on worldwide GDP growth, the ILO estimates an increase in global unemployment of between 5.2 million (“low” scenario) and 24.7 million (“high” scenario) from a base level of 188 million in 2019. For comparison, the 2008/9 global financial crisis hiked global unemployment numbers by 22 million.
The organization also expects underemployment to increase “on a large scale” as the economic fallout of the coronavirus outbreak cuts back working hours and wages. Drops in employment could translate into significant income losses for workers of between $860 billion and $3.4 trillion by the end of 2020, it added.
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“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,” ILO director-general Guy Ryder said in a statement. “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.”
The ILO note also warned that certain groups in less protected and low-paid jobs, such as youth and older workers, women and migrants, will be disproportionately affected by the jobs crisis, which could worsen inequality.
The organization also expects working poverty to increase significantly as the “strain on incomes resulting from the decline in economic activity will devastate workers close to or below the poverty line.” In all, between 8.8 million and 35 million additional people will be in working poverty worldwide, compared to the original estimate of 14 million for 2020.
Still, society can wield two “key tools” to help mitigate the damage and restore public confidence in a time of crisis, Ryder said. The first, social dialogue with workers and employers, is“vital” for building public trust and support for the measures necessary to overcome the jobs crunch. The second, international labor standards, provide a “tried-and-trusted foundation” for policy responses that focus on a recovery that is “sustainable and equitable.”
“Everything needs to be done to minimize the damage to people at this difficult time,” he added.
Already, garment production has slowed or stall across the global South, imperiling the livelihoods of garment workers who live in already precarious circumstances with poverty wages and little social protection. Factories in China, where the COVID-19 epidemic first began three months ago, are still struggling to get back online after a nationwide shutdown, even as the number of cases is starting to dwindle.