Nearly half of global workforce is at risk of losing livelihoods due to coronavirus pandemic, warns ILO
Nearly half of the global workforce or nearly 1.6 billion people in informal work are at risk of losing their livelihoods due to lockdowns and restrictions amid the coronavirus pandemic, according to a new report by the International Labour Organization, a UN agency.
The informal workers — who have suffered massive damage to their capacity to earn a living — represent the most vulnerable in the labor market, out of a worldwide total of two billion and a global workforce of 3.3 billion. This is due to lockdown measures and/or because they work in the hardest-hit sectors, say experts. The researchers estimate that around 436 million enterprises in the hardest-hit sectors worldwide are currently facing high risks of serious disruption. More than half of these – some 232 million – are in wholesale and retail trade, currently one of the most impacted sectors globally.
As of April 22, close to 1.1 billion informal economy workers live and work in countries in full lockdown, and an additional 304 million in countries in partial lockdown. These workers together represent 67 percent of informal employment. “Taking into account the additional effects of sectoral risk, employment status, the size of enterprises and different levels of lockdown measure -- results in an even higher estimate of the impact of COVID-19 on informal economy workers. This estimate suggests that almost 1.6 billion informal economy workers, accounting for 76% of informal employment worldwide, are significantly impacted by the lockdown measures and/or working in the hardest-hit sectors,” says the ‘ILO Monitor third edition: COVID-19 and the world of work.’
Among informal economy workers significantly impacted by the crisis, women are overrepresented in high-risk sectors: 42 percent of women workers are working in those sectors, compared to 32 percent of men. “The worst global crisis since the Second World War, the COVID-19 pandemic continues to severely affect public health and cause unprecedented disruptions to economies and labor markets,” say experts.
“As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent. 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,” says ILO Director-General Guy Ryder in the analysis.
The UN agency estimates that people in informal work have experienced a 60 percent drop in income in the first month of the coronavirus crisis. “By region, the expected decline is the largest in Africa and Latin America, at 81%. Regarding income groups, it is 82% in lower-middle and low-income countries, 28% in upper-middle-income countries, and 76% in high-income countries,” the findings state.
The experts say that even once containment measures are lifted, surviving enterprises and own-account workers will continue to face challenges given that recovery is expected to be uncertain and slow. “For those that are engaged in global supply chains, disruptions are likely along the forward and backward linkages of the chain as other countries continue to face reductions in economic activity,” says the report.
“Restarting businesses will require significant adjustments with cost implications, including securing safe work environments. Unless tackled by effective policies, these new requirements are likely to put a severe constraint on businesses,” it cautions.
The decline in working hours in the second quarter is now expected to be even worse than initially estimated. Based on estimates from April 22, global working hours in the current (second) are expected to be significantly worse than previously estimated. Compared to the pre-crisis situation (fourth quarter of 2019), a 10.5 percent deterioration is now expected, which is equivalent to 305 million full-time jobs (assuming a 48-hour working week). The previous estimate was for a 6.7 percent drop, equivalent to 195 million full-time workers. This is due to the prolongation and extension of lockdown measures, say experts.
While the situation has worsened for all major regional groups, estimates indicate that the Americas (12.4 percent) and Europe and Central Asia (11.8 percent) will experience the greatest loss in working hours. Regarding income groups, lower-middle-income countries are expected to register the highest rate of hours lost, at 12.5 percent, but the impact is comparable across countries with different levels of income, says the report.
Based on their findings, the ILO has called for urgent, targeted, and flexible measures to support workers and businesses, particularly smaller enterprises, those in the informal economy, and others who are vulnerable. Measures for economic reactivation should follow a job-rich approach, backed by stronger employment policies and institutions, better-resourced and comprehensive social protection systems, say experts.
“The impact of the pandemic is likely to be uneven, adding significantly to existing vulnerabilities and inequalities. In the recovery phase, greater attention should be paid to the strengthening of employment policies to support enterprises and workers, along with strong labor market institutions and comprehensive and well-resourced social protection systems, including care policies and infrastructure, that kick in automatically and in an inclusive way as crises occur,” the experts recommend.
As of April 30, over 3,194,663 COVID-19 cases have been reported globally, and more than 227,671 have died in the coronavirus pandemic, shows the Johns Hopkins tracker.