Covid-19: 50 % of the world's workforce at risk of losing its livelihoods

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The latest data from the International Labour Organization (ILO) on the impact of the COVID-19 pandemic on the labour market reveals its devastating effects on workers in the informal economy and hundreds of millions of enterprises around the world. As job losses intensify, nearly half of the global workforce is at risk of losing their livelihoods. The consequences cascade down to mental health.

As a result of the continued significant decline in the number of hours worked worldwide due to Covid-19, 1.6 billion workers in the informal economy - almost half of the world's workforce - now face the immediate danger of seeing their livelihoods destroyed, warns the ILO.
According to the ILO Observatory Note, "VIDOC-19 and the World of Work 3rd Edition "The decline in the number of hours worked for the current quarter (second quarter 2020) is expected to worsen significantly compared to the previous estimate.

In other words, almost half of the 3.3 billion workers on the planet. A "huge impact on poverty" is to be expected, the ILO warned.

Compared to pre-crisis levels (4th quarter 2019), a decline of 10.5% is expected, equivalent to 305 million full-time jobs (based on a 48-hour work week). The previous estimate predicted a fall of 6.7%, equivalent to 195 million full-time workers. This is the consequence of the extension and expansion of the containment measures. In this context, the urgency of deconfinement is becoming more and more important, even though there is a risk of relaunching the pandemic.

For ILO Director-General Guy Ryder, in a statement to the media, " A huge impact on poverty is to be expected. Millions of companies around the world are struggling to keep their heads above water. They have no savings or access to credit. This is the true face of the working world. If we do not help them now, they will simply perish."

Global Economic Crisis

Beyond the human drama, the economic indexes continue to plummet, confirming the dramatic impact of the pandemic on the global economy. For the most part, the situation has worsened at the regional level. According to the ILO, the sectors most affected by the paralysis of the economy are accommodation and food services, industry, wholesale and retail trade, real estate and commercial activities.

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In the Americas, the estimate is 12.4% of lost hours worked in Q2 (compared to pre-crisis levels). As a result of the coronavirus, growth in the United States has fallen for the first time in a decade, further illustrating the economic urgency of the deconfinement process that has begun in several countries, but still under threat of a resurgence of the pandemic that could now directly affect children.

After ten years of uninterrupted growth, the United States announced Wednesday a decline in its GDP of 4.8% in annual pace for the first quarter of the year, according to a preliminary estimate by the Department of Commerce. This comes at a time when more than 26 million people have registered unemployment in the last five weeks, an unprecedented number. This is the largest drop in GDP since the last quarter of 2008 when the United States was sinking into the financial crisis.

It is 11.8% for Europe and Central Asia. Estimates for the other regions of the world are fairly close, all being above 9.5%.

The German government is expecting the worst recession since calculations began in 1970, with GDP falling by 6.3% this year, Economics Minister Peter Altmaier said on Wednesday. « We're about to experience the worst recession in the history of the German Republic« he warned.

As for France, the second draft Supplementary Budget Bill (PLFR) provides for a contraction of 8% of GDP and a public deficit of 9% in 2020. Never seen since 1945.

Impact on the informal economy

As a result of the economic crisis created by the pandemic, nearly 1.6 billion workers in the informal economy (representing the most vulnerable in the labour market) have suffered a severe reduction in their earning power, out of a global total of 2 billion and a global workforce of 3.3 billion. This is a consequence of containment measures and/or because they work in the most affected sectors.

It is estimated that the first month of the crisis led to a decline of 60% in the income of informal workers worldwide. This translates into a drop of 81% in Africa and the Americas, 21.6% in Asia and the Pacific and 70% in Europe and Central Asia.

Although the coronavirus was slow to arrive in Africa, the continent was one of the first to close its borders and ban mass gatherings. As Le Monde explains, "Mauritius, Rwanda and Tunisia were the first to impose total containment, with Mauritius going so far as to close its supermarkets and bakeries for ten days. South Africa, the continent's leading industrial power, followed suit. And on Monday, Nigeria extended for two weeks the confinement in Abuja, the federal capital, and Lagos, Africa's most populous city with 20 million inhabitants. In both cities, millions of people depend on the informal economy to survive. »
Jakkie Cilliers, an expert with the Institute for Security Studies, notes that "the inevitable reaction was to follow what the rest of the world was doing. Interviewed by Le Mondehe "calls on Africans to come up with their "own solution" to defeat the virus:" Containment is impossible to implement and is untenable in most of Africa, he argues. You condemn people to choose between starving to death or getting sick. Ten people living in a tin shed can't go three weeks without going outside..."

Another example is the United States, where millions of people have lost their jobs in just a few weeks, and demand for food aid is soaring across the country, reports the New York Times. Charities, which were never intended to manage a national crisis, are overwhelmed.

Asian and Pacific countries are also experiencing a sharp increase in poverty. As growth collapses, between 11 and 24 million people are reportedly forced to remain below the poverty line and live on less than $5.50 a day, according to a World Bank alert.

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Without alternative sources of income, these workers and their families will have no means of subsistence.

Businesses at Risk

The proportion of workers living in countries where workplaces are subject to mandatory or recommended closures is down from 81% to 68% in the last 15 days. This decline from the previous estimate of 81% reported in the second edition of the Observatory (published on April 7) is mainly due to changes in China. Elsewhere, workplace closures are on the rise.

Worldwide, more than 436 million businesses face high risks of disruption. They operate in the most affected economic sectors, including 232 million in wholesale and retail trade, 111 million in industry, 51 million in hotels and restaurants, and 42 million in real estate and other commercial activities.

Mental health consequences for many workers 

According to an analysis on 28 April by Lode Godderis, from the Centre for Environment and Health at the Ministry of Public Health and Primary Care (Belgium), the pandemic and the resulting economic recession will exacerbate pre-existing health disparities and will have an even greater impact on the mental health of vulnerable and disadvantaged groups, especially people with disabilities and the unemployed.

The researcher explains that " We need to be aware of the long-term consequences for the health of all workers. Staff absences can be expected, not only due to VIDOC infection19 , but also due to stress, frustration and isolation. Deep inequalities in health as a result of the pandemic and the economic recession are also feared. For health care workers, mental health problems are mainly related to a high workload during the crisis. For employees, it is rather isolation and confinement that is likely to affect their mental health. Finally, for workers, mental health problems could stem from job insecurity and loss of income. "

Is it possible to reverse the trend? For Lode Godderis, "Looking back at previous pandemics that have been followed by economic recession, it is clear that countries that invest in social protection and support programmes and provide sufficient employment opportunities can mitigate the effects of any mental health crisis resulting from a pandemic. Overworked health care workers will need time to recover from this period, even as health care services return to a normal level of functioning. It is important that those who worked remotely from home during the crisis prepare mentally for returning to work. They may be reluctant to return to work, fearing an increased risk of infection or an uncertain work future. Finally, it is worth mentioning workers - a large part of the population - who have already lost their jobs, have to cope with reduced working hours or face sharp wage cuts. »

In general, recessions exacerbate existing health disparities and have an even greater impact on the health of vulnerable and disadvantaged groups, such as the disabled, the sick and the unemployed. For these categories of workers, further support measures are needed to enable them to resume their functions in society, but also to avoid serious financial and mental health consequences.

To date, pandemic planning activities have not adequately addressed these underlying inequalities and the social determinants of health. If the extraordinary wave of solidarity generated by the VIDOC-19 pandemic could be harnessed, the effects of the economic downturn could have an unexpectedly positive impact on our health. But this requires the implementation of appropriate measures to avoid health disparities.

Lode Godderis advocates that " Governments should develop plans to reduce inequalities in the burden of disease, both nationally and internationally. Their efforts should focus primarily on workers in lower social classes, where measures may be more effective in mitigating the effects of disease. International collaboration is also needed to support low- and middle-income countries, where a large proportion of the population is poor. "

Financial and mental health security in the aftermath of the VIDOC crisis will depend on whether or not supportive policies targeting social inequalities are adopted. Thus, even in the event of a recession, creating or maintaining secure jobs will ultimately minimize the impact on workers' health after the crisis.

Need for urgent action

The ILO calls for urgent, targeted and flexible measures to support workers and enterprises, especially small enterprises, those in the informal economy and other vulnerable people.

These economic stimulus packages must be employment-generating, supported by stronger labour policies and institutions, and better-funded and more comprehensive social protection systems. International coordination of stimulus measures and debt relief is also essential to make economic recovery optimal and sustainable. International labour standards, which already enjoy tripartite consent, can serve as a framework.

" As the pandemic evolves and the employment crisis unfolds, the need to protect the most vulnerable becomes more and more pressing. "says Guy Ryder, Director-General of the ILO. « For millions of workers, the lack of income means nothing to eat, and the total absence of security and a future. Millions of companies around the world are struggling to keep their heads above water. They have no savings or no access to credit. Yet this is the true face of the world of work. If we do not help them now, they will simply disappear."
(Sources: ILO, AFP, UN)

Header photo The people of Naples hang baskets full of food for the less fortunate during the coronavirus crisis. ©internewscast.com

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