Even as the number of cases of COVID-19 continues to rise across the world, the International Labour Organization warns that another pandemic is on its way: this one, a hunger of “biblical proportions.”
Average incomes in the informal economy have already plunged between 60 percent and 80 percent, thrusting large swathes of the global workforce into abject poverty, Guy Ryder, director general at the ILO, said during the Financial Times’s Global Boardroom digital conference Tuesday.
The formal sector isn’t doing much better, either. As of April 22, 2.2 billion people, accounting for 68 percent of the planet’s workforce, were living in countries with virus-induced workplace closures. Compared with the same time last year, the number of work hours fell 4.5 percent (the equivalent of of 130 million full-time jobs) in the first quarter of 2020 and 10.5 percent (the equivalent of 305 million full-time jobs) in the second.
“Just by way of comparison, we think the number of jobs hit in 2008-2009 [during the Great Recession] was 22 million, so we’re in much worse territory at this point,” Ryder said.
Still, it’s informal workers, perched as they are on the “sharpest possible end” of the impact spectrum, who are less equipped to ride out the social and economic turmoil of the pandemic. Six out of 10 workers in the world eke out employment beyond the reach of labor legislation and social protections, Ryder said.
“Basically, we estimate that 1.6 billion of these 2 billion informal workers in the world now face an imminent and major impact on their livelihoods,” he said.
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Poverty rates, the ILO has estimated, are poised to shoot up from a global average of 26 percent to 59 percent and could worsen depending on the duration of the health crisis.
Enterprises at greatest risk, Ryder said, include wholesale and retail trade, manufacturing, real estate and accommodation and food services, with micro-firms of between two and nine employees bearing the biggest fiscal brunt.
To mitigate these problems, the ILO has developed four “pillars” of policy response for member states to lean on in the immediate phase of the pandemic.
At the outset, governments can use monetary instruments to stimulate employment and economic activity, though Ryder would like to see efforts less siloed by country and greater international cooperation.
“We’ve seen a lot done, country by country, when the [Group of 20] leaders met in March and talked about putting $5 trillion into the global economy as if this were an international collective effort to correct the negative impacts of the pandemic,” he said.
The second pillar involves supporting enterprises, jobs and incomes by extending social protections for all, implementing employment retention measures and providing financial, tax and other relief for businesses.
“But we know this doesn’t come cheap and there is some debate developing about the sustainability over time of this kind of policy intervention,” he said.
Pillar No. 3 involves protecting workers in the workplace now: strengthening occupational, health and safety measures, adapting work arrangements (such as teleworking), providing healthcare access for all, preventing discrimination and exclusion, and expanding access to paid leave.
“Large numbers of people are still working today; there are 170 million frontline workers in the world and up to 70 percent of them are women,” Ryder said. “I think there are unfortunate instances where those people have not been afforded the type of safety and health protection that they should have. But as we move into the return-to-work discussion, as many countries now are, it seems to me absolutely essential that the safety and health aspects of what we’re doing is given the top priority.”
The last pillar hinges on tapping social dialogue for solutions. The ILO recommends strengthening the capacity and resilience of employers’ and workers’ organizations, strengthening the capacity of governments and strengthening social dialogue, collective bargaining and labor relations institutions and processes.
“This is the joint action of governments, organized labor and the business community to try to come up with the right practical solutions to the extraordinary circumstances that we are facing,” Ryder said.
For Ryder, the pandemic has the feel of a “disaster, apocalyptic movie,” and a happy ending isn’t a given.
“Whether we like it or dislike it, we are moving toward a new normal and one aspect we need to think about is the policy choices we opt for,” he said. “Are we in a period of de-globalization? Are we going to have to redesign our supply chains, either because they’ve demonstrated they’re far too vulnerable to external shocks, that they present security problems or simply that they represent bad business?”
Ryder says he doesn’t have a clear answer, but he hopes the industrial sector will use the opportunity to consider how it can reset “in line with some of the challenges that we all detected before the pandemic.”
“I think one thing this pandemic has done in the strongest possible terms is to bring to the surface the underlying vulnerability of working people who are falling through the cracks, not only informal workers [but also] gig workers who are emblematic of the new economy,” he said. “So we have to come back to this idea of resetting our world of work; we have to take account of the inequalities and vulnerabilities that have been brought to the surface; we have to pick up again.”