ILO warns of “devastating losses” from COVID-19 equivalent to 230 million jobs

The Great Recession of 2008 will fall short of the impact of the coronavirus on employment. “It is the worst world crisis since World War II.” The International Labor Organization (ILO) has presented its first detailed estimates of the impact on the labor market of the COVID-19 epidemic worldwide on Tuesday, after preliminary estimates that the agency fears have remained very limited. The ILO estimates that there will be a reduction in employment in the second quarter of 2020 of around 6.7% of hours worked, the equivalent of 230 million full-time workers (with a 40-hour day per week).

The ILO shows all caution in its estimates given the uncertainty linked to this new virus. Their calculations aim to reflect “the effect of the crisis in its current state (in particular, with regard to the effects of confinement measures),” the study said. The loss of hours worked reflects “both layoffs and other temporary reductions in working time.”

ILO Director-General Guy Ryder explained these data at a press conference from Geneva, in which he pointed out that the report does not give an estimated figure for job loss at the end of 2020 because they believe that, as of Today, there are no reasonable estimates to make. In initial calculations, the entity estimated that about 25 million people would be unemployed at the end of the year, but “there is a high risk” that the number “will far exceed the initial projection,” the organization indicates.

Ryder has been very clear on one issue. He has dismissed as “false dilemma” the voices that try to oppose “saving lives or saving the economy”. The priority is the response to the health emergency to minimize the number of deaths, the ILO director has indicated, in view of which the appropriate health measures must be implemented, which at present are mainly based on the confinement of the population and in the paralysis of some economic activities. In this scenario, it is time to analyze what policies are necessary to minimize damage to the economy and reactivate it as soon as possible, Guy Ryder explained.

An “unprecedented” crisis

Everything will depend on “how quickly the economy recovers in the second half of the year and on the effectiveness of political measures to boost the demand for labor,” the organization subscribes in an information note. In this, the ILO underlines on numerous occasions the magnitude of the current crisis, of “catastrophic effect” on the labor market, with “devastating losses of jobs and hours of work”.

The estimates only “represent the best possible indication of the current impact on labor markets, based on available data.” In fact, Guy Ryder has explained that the organization will update the data within two weeks to adapt it to how the pandemic evolves and the response of the States to this crisis.

And is that never before had experienced something similar to this. “The consequences of COVID-19 on employment are profound, far-reaching and unprecedented,” the report warns. The international organization explains that “the adjustment of employment usually follows the economic contraction with some delay”, for example, as happened with the increase in the unemployment rate after the 2008 global financial crisis. “In the present crisis, closings and other measures have directly affected employment and to a greater extent than initially anticipated when the pandemic began, “the report said.

Southern Europe, the most affected area

ILO estimates show a picture of how the epidemic will affect employment in different regions of the world. The most affected subregion of all is southern Europe, where Spain is located. According to the organization’s projections, the loss of hours of work in the second quarter of the year will be 9.1%, the equivalent of five million full-time workers.

By broader regions, the study points first to the Arab States (with an affectation of 8.1% of working hours, equivalent to 6 million full-time workers), in Europe (7.8%, or 15 million workers) and in Asia and the Pacific (7.2%, 150 million workers).

In Spain, the unemployment figures for March offer us an image of the first impact of the coronavirus on the labor market. 900,000 jobs were destroyed in the last fifteen days of the month, according to the figures of affiliation to Social Security. The Ministers of Labor, Yolanda Díaz, and of Social Security, José Luis Escrivá, did not want to make an estimate of how employment will evolve in the coming months because of COVID-19, since they pointed out that its effects are still very uncertain. .

Commerce and hospitality, sectors most affected

The impact on the labor market “is far from uniform,” says the ILO, which detects some specific sectors that “suffer most of the collapse of economic activity.”

The four sectors most affected, which have a “high impact” at the current time of the epidemic on economic production are: Accommodation and food service activities; Real estate, administrative and commercial activities; manufacturing industry and wholesale and retail trade, repair of motor vehicles and motorcycles.

According to the context of each country, workers in these four sectors (a total of 1.25 billion people, 38% of the world’s active population) face “a drastic and overwhelming reduction in working hours, wage cuts and layoffs, and are likely to make up the bulk of the very short-term forecast model estimates outlined above. “

International action to avoid “collapse”

In addition to the figures, the ILO has offered a series of recommendations to face the epidemic and minimize the effects of this crisis. ILO Director-General Guy Ryder has insisted that “coordinated action” is necessary at the international level, in which he has mentioned organizations and entities that must orchestrate a response to the virus, such as the G-20, the European Union and the United Nations.

The good actions of the States at the individual level will not suffice, Ryder insisted, stressing the need for “solidarity” and “cooperation” to help the countries that find it most difficult to combat the effects of COVID-19.

“Workers and businesses face catastrophe, both in developed and developing economies,” Ryder said. “We have to act quickly, decisively and in coordination. The correct and urgent measures could make the difference between survival and collapse.”


Source link