The economic and labour crisis created by the coronavirus pandemic could result in the loss of 25 million jobs across the globe, according to a recent report published by the United Nations
An initial assessment of the economic impact of the COVID-19 pandemic by the International Labour Organization (ILO) in the report ‘COVID-19 and World of work: Impacts and responses’ says that “the effects will be far-reaching, pushing millions of people into unemployment, underemployment and working poverty, and proposes measures for a decisive, coordinated and immediate response.”
Weighing out different scenarios in light of the pandemic, ILO has estimated an unemployment rate between 5.3 million in a “low” impact scenario and 24.7 million in the worst-case scenario. from a base level of 188 million in 2019.
“Underemployment is also expected to increase on a large scale, as the economic consequences of the virus outbreak translate into reductions in working hours and wages. 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 (e.g. service providers) and goods,” says ILO.
The study also estimates a huge plunge in global income between $860 billion and $3.4 trillion by the end of 2020 which will, in turn, lead to a huge decrease in consumption of goods and services, in turn affecting the prospects for businesses and economies.
“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 Guy Ryder, ILO’s Director-General.
The report also highlights a few measures that can be taken to control the impact of the crisis.
The measures include “extending social protection, supporting employment retention (i.e. short-time work, paid leave, other subsidies), and financial and tax relief, including for micro, small and medium-sized enterprises. In addition, the note proposes fiscal and monetary policy measures, and lending and financial support for specific economic sectors.”
“Unlike the 2008 financial crisis, injecting capital in the financial sector alone is not the answer. This is not a banking crisis – indeed banks must be part of the solution. And it is not an ordinary shock in supply and demand; it is a shock to society as a whole. The liquidity of the financial system must be guaranteed, and banks must use their resilience to support their customers. Let’s not forget this is essentially a human crisis,” said United Nation’s Secretary-General António Guterres in an official statement on Thursday.
“Most fundamentally, we need to focus on people -- the most vulnerable, low-wage workers, small and medium enterprises. That means wage support, insurance, social protection, preventing bankruptcies and job loss,” he further said.
The number of confirmed cases of the coronavirus pandemic across the globe has surpassed the 2,00,000 mark according to media reports.