Millions Destitute & Desperate From Pandemic Scare Fallout

UN International Labour Organization calls for urgent reform to get the world back to work after extended covid-19 shutdown.

1.6 billion people surviving in the ‘informal economy’ face destitution amidst covid-19 pandemic panic job losses. Photo: Erik Scheel.

With more than half the world’s workforce facing destitution and uncertainty due to the lay-offs caused by covid-19 pandemic scare, the director-general of the International Labour Organization (ILO) is demanding urgent international collaboration to get the world’s most severely affected back to work.

As a United Nations agency, the ILO aims to give an equal voice to workers, employers and governments in 187 member state countries. The agency’s latest estimate of the impact on the world’s workers from the pandemic panic was published on April 29.

ILO Director-General Guy Ryder said there was an urgent need to create a job-rich environment, and that the agency could provide the framework to implement international labour standards.

An estimated 1.6 billion individuals worldwide now have zero income due to businesses shutting down for months amidst the covid-19 scare.

“For millions of workers, no income means no food, no security and no future. Millions of businesses around the world are barely breathing. They have no savings or access to credit. These are the real faces of the world of work. If we don’t help them now, these enterprises will simply perish,” implored the director-general.

Stimulus packages and debt relief measures were also critical for sustainable recovery, along with stronger employment policies, better-resourced and comprehensive social protection systems, he added. 

“As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent,” said Ryder.

Job Losses Set to Double in Extended Lockdown Period

The ILO expects about 305 million full-time jobs to be lost due to the extended lockdown measures affecting a broad spectrum of industries, based on predictions for the second quarter of the year.  

Before the worldwide shutdown, the ILO estimated a 6.7 per cent drop in employment, which would put 195 million full-time workers out of work.

Revised estimates are for a 10.5 percent drop, resulting in a staggering loss of about 305 million full-time jobs.

The ILO figures represent workers considered most vulnerable and most affected by the shutdown – those who earn a living in the world’s ‘informal economy’ sectors – yet they are the backbone of national and international commerce.

Who Makes up the Informal Economy?

About two billion (61%) of the world’s working population make up the informal economy. They are the diverse range of individuals, enterprises and wage jobs not protected by the state. They don’t  get any compensation when the world shuts down and they lose their jobs.

Retailers, market vendors, farmers, restaurant staff, factory workers, builders, taxi drivers and many other professions are among the rudimentary jobs in the informal economy.

The regions most affected by the covid crisis are Europe, Central Asia and The Americas. The ILO’s latest estimates predict a 12.4 per cent loss of working hours for labourers in the Americas and an 11.8 per cent drop in Europe and Central Asia.

The fear of a pandemic and subsequent shutdowns of all but ‘essential’ services during the first quarter of 2020 has reportedly severely impacted about 3.3 billion people in the world’s working population. 

Lower and middle income economies are the most severely affected, causing job losses for about 1.6 billion people. Many of them working to support family members, too.  

Without alternative income sources, billions of families are being forced into poverty with no means of survival.

Small Enterprise Hardest Hit

More than 436 million enterprises have been disrupted in hardest hit sectors, comprising 232 million wholesale and retail businesses, 111 million in manufacturing, 51 million in hospitality-related services, plus 42 million in real estate and other sectors.

Pre-covid street scenes in Hong Kong. Photo by Nice Guys

Promising Improvement in China

The IOL’s initial predictions released April 7 estimated that more than 80 per cent of China’s workforce would be affected by workplace closures. However, the updated estimates and analysis released April 29 have dropped to 68 per cent, attributed to recent loosening of workplace restrictions in China.

The ILO director-general insisted that urgent policy measures were needed. He called for targeted and flexible measures to support workers and businesses, particularly smaller enterprises and others at risk of financial ruin in the informal economy.

“As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent,” he concluded.

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