International Labour Organization

COVID-19 pandemic — loss of work in first half of 2020 and projections for remainder of the year

The International Labour Organization (ILO) puts out the “ILO Monitor: COVID-19 and the world of work”. The most recent edition (fifth) is dated 30 June 2020. See https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/briefingnote/wcms_749399.pdf. The OECD also puts out an annual OECD Employment Outlook. The 2020 publication covers data through May 2020. OECD(2020), OECD Employment Outlook 2020: Worker Security and the COVID-19 Crisis, OECD Publishing, Paris, https://doi.org/10.1787/1686c758-3n. For purposes of this post, I am limiting my review to the ILO Monitor.

The ILO Monitor shows the loss of working hours by quarter in the first half of 2020 both globally and by region and provides estimates of work loss in the second half of the year using a baseline scenario based on the OECD June Economic Outlook and an optimistic scenario and a pessimistic scenario. The ILO Monitor stresses the disproportionate impact that the pandemic has had on women. The hours of work lost are translated into number of job equivalents using a 40 hour work week and a 48 hour work week. The figures are staggering in terms of equivalent job losses as laid out in the following table (using 48 hour work week)(taken from Table 1 on page 6):

REGION2020 1ST QTR employment loss (millions)% hours lost2020 2ND QTR employment loss (millions)% hours lost
world1555.440014.0
Africa92.44512.1
Americas113.07018.3
Arab States23.1813.2
Asia and the Pacific1257.123513.5
Europe and Central Asia113.44513.9

Looking at the fourth quarter of 2020, depending on whether there is a second wave of the COVID-19 pandemic, a faster than expected recovery or the baseline projection, the number of job equivalents lost are estimated at 140 million jobs using the baseline, 34 million jobs using the optimistic scenario and 340 million jobs using the pessimistic scenario.

Working through the data in the ILO Monitor shows a greater impact on women from the economic contraction flowing from the pandemic. Earlier Monitors had looked at the impact on informal workers and on young workers, groups also disproportionately adversely affected. The Fifth Edition identifies four main ways in which the COVID-19 pandemic is disproportionately affecting women workers:

“First, a large proportion of women work in sectors severely affected by the crisis.” (page 8)

“Second, women in domestic work have been highly vulnerable to containment measures.” (page 9)

“Thirdly, the overwhelming majority of workers in the health and social work sector are women.” (Page 9)

“Fourthly, during the crisis, the unequal distribution of increased care demands affects women disproportionately.” (Page 9)

The ILO Monitor ends with what are viewed as the Key challenges ahead (pages 15-16):

“Key challenges ahead

“Despite the extraordinary and often unprecedented measures introduced around the world, the damage done by the COVID-19 crisis to labour markets is enormous and leaves policymakers to confront major policy challenges. Actual labour market outcomes for the rest of 2020 and beyond will depend on the choices they make, as well as on the pandemic’s future
trajectory. Moreover, the decisions taken in the near future are likely to have long-lasting implications for the world of work.

“Countries will not all face the same situation. The gravity of the issues they must resolve and the tools and resources that they can bring to the task will vary considerably. But a number of key challenges will have to be addressed by most, if not all, of them.

First, finding the right balance and sequence of health and economic and social policy interventions to produce optimal sustainable labour market outcomes. From the onset of the pandemic, priority has had to be given, with varying degrees of success, to containing and eliminating the spread of the virus. While this has had major economic and social costs, it is the necessary precondition for sustainable recovery. Nevertheless, policymakers are increasingly called upon to make tough calls about the timing of the reopening of workplaces, the health protocols to be observed in them, and the continuation, or not, of support to enterprises and workers that are unable to resume normal activities. Such decisions are made all the more difficult by the costs to the State and to private actors of the prolongation of restrictions, the concern that premature action could precipitate a second wave of the pandemic, and the increasing pressure of public opinion.

Secondly, implementing and sustaining policy interventions on the necessary scale at a time when resources are increasingly constrained.
General acknowledgement of the need to do ‘whatever it takes’ to sustain economic activity, jobs, enterprises and incomes in the course of the pandemic has led governments to set aside prior fiscal and monetary targets.
Many countries will be faced with high levels of debt and highly constrained monetary policy options even if the pandemic recedes in the coming months. The lasting damage inflicted on labour markets, and the difficult global economic conditions that will prevail, indicate that supportive policies would need to be maintained to sustain
recovery, but this will be in a context of unprecedented fiscal and monetary conditions. Premature fiscal consolidation, such as that which followed the financial crisis of 2008–09, would risk destabilizing already weak labour markets.

Thirdly, supporting vulnerable and hard-hit groups, and generating fairer labour market outcomes. The pandemic has laid bare some of the worst deficits and inequities of the world of work and made them worse. Women, young people and informal workers were all severely disadvantaged before the onset of the crisis, and they are among those who have suffered some of its most severe consequences. Similarly, public
opinion has been awakened to the often difficult and undervalued work of groups of the labour force – notably health and care workers, cleaners and
domestic workers – whose contribution has been, and remains, essential to overcoming the pandemic. Unless explicit attention is paid to improving the position of the most disadvantaged and vulnerable, the recovery processes could aggravate existing injustices.

Fourthly, securing international solidarity and support especially for emerging and developing countries. Whatever the achievements of countries individually, the overall response to the global COVID-19 crisis has been characterized by a marked deficit of international cooperation. The evidence presented in this edition of the ILO Monitor shows that the enormous volume of resources deployed by high income countries to combat the pandemic has simply not been available to others. This has a major impact on the capacity of developing and emerging countries to protect their citizens and curb the pandemic, which, in turn, will impair the prospects for all countries. The rhetoric of the need for a global response to the global crisis of COVID-19 needs to be translated into concrete measures to assist countries with limited fiscal space, in particular through multi- lateral action to deliver concessional finance and debt relief.

Fifthly, strengthening social dialogue and respect for rights at work. In many cases, social dialogue – bringing together governments, employers and workers – has proved its worth in shaping effective, balanced and acceptable policy responses at the sectoral and national level. Social dialogue can likewise help to shape sustainable recovery paths in the period ahead. People in most countries have been subject to far-reaching restrictions on their personal freedoms during the pandemic, which has generally been considered necessary and legitimate. However, such acceptance depends on them being proportionate, appropriate and limited in time. The COVID-19 pandemic provides no justification for any restrictions on fundamental rights at work, as enshrined in international labour standards, and upholding these rights fully is a precondition for effective social dialogue.”

The Fifth edition of the ILO Monitor is embedded below.

wcms_749399

Conclusion

The COVID-19 pandemic is first and foremost a global health crisis. Much of the focus on the economic consequences of countries’ efforts to control the spread of the coronavirus focus on the contraction of trade, contraction of GDP and the trillions of dollars that have been pumped into economies to reduce the negative economic effects. But the toll on workers has obviously been enormous. The ILO Monitor provides some easy to understand tables on the sweeping labor consequences and the challenges to recovery and fair treatment to those most adversely affected.