Global job losses caused by the coronavirus outbreak will be far worse than expected just two weeks ago because many countries have since decided on longer or stricter lockdowns, says the International Labour Organization.
The UN agency now estimates that global working hours in the second quarter of 2020 will be 10.5 per cent lower than their pre-crisis level in the last quarter of 2019 — equivalent to the loss of 305m full-time jobs. Earlier this month, it had forecast a second quarter fall in working hours equivalent to 195m full-time job losses.
The ILO said on Wednesday that the “significant deterioration” was driven largely by the extension of containment measures, although it also now has more information to guide its forecasts, including official data for the first quarter and more timely mobility data collected by Google.
“We all have to think of the human suffering, the human need that stands behind that extraordinary figure,” said Guy Ryder, the ILO’s director-general, adding that the crisis would have a “massive poverty impact” among the 1.6bn people working in the informal economy worldwide who were significantly affected by lockdown measures. Although China was now beginning to lift some of its containment measures, 64 more countries had adopted recommended or required workplace closures since April 1, said the ILO.
It now expects the biggest drop in working hours — estimated at about 12 per cent — to be in the Americas, Europe and Central Asia; but even in Africa, the least affected region, it forecasts a fall in working hours of close to 10 per cent.
However, the biggest hit to household incomes will be in countries where a large proportion of the workforce is in the informal economy.
The ILO said that of 2bn people working informally around the world, about 1.6bn had suffered “massive damage to their capacity to earn a living” because they were either directly affected by workplace closures or were in sectors hard hit by social distancing measures.
It estimated that in the first month of the crisis, the income of informal workers fell 60 per cent globally, with a drop of more than 80 per cent in Africa and Latin America.
This would lead to a steep rise in the rate of relative poverty — the proportion of workers with monthly earnings of less than half the national median — which the ILO estimated could rise to more than 80 per cent in high income countries, as well as in Africa and the Americas.
“We do need to concentrate on the most vulnerable. We need to act fast, we need to act at scale and . . . we need to focus on providing the basics of social protection to those who otherwise would not have it,” said Mr Ryder.
The ILO’s forecasts are an attempt to quantify the immediate impact of lockdowns. It has not given any forecast for job losses over the year as a whole, but warned that even once containment measures were lifted, there would be continuing disruption to global supply chains, while restarting businesses with new safety measures in place would require “significant adjustments with cost implications”.
