RIO DE JANEIRO, BRAZIL – Faced with an unprecedented crisis intensified by the paralysis of much of the world’s trade and business activity, the International Labor Organization (ILO) projects that the novel coronavirus pandemic will eliminate up to 195 million jobs.
That number was much lower three weeks ago, when the organization expected a loss of 25 million jobs if governments did not act quickly to protect workers from the impact of the pandemic.
Since then, countries have rushed to pump liquidity into markets and implement fiscal and monetary measures, but the most sensitive part of the economy – employment – now shows a downward spiral.
The number of hours worked has dropped more sharply since April 1st, according to the ILO, and is expected to drop by 6.7 percent in the second quarter of 2020, according to the organization’s estimates, which is equivalent to those 195 million full-time workers.
The ILO estimates that nearly 38 percent of the global labor force (1.25 billion workers) is employed in sectors that are now facing a severe decline in production. The main sectors include retailing, housing and catering services, and manufacturing.
The isolation measures enforced by countries to avoid increased contagion by Covid-19 now affect nearly 2.7 billion workers, says the ILO, representing around 81 percent of the world’s labor force.
“Companies in several economic sectors are facing catastrophic losses, which threaten their operations and their solvency, particularly the smaller ones. Meanwhile, millions of workers are vulnerable, mainly in the casual sector of the economy, to income losses and layoffs,” says the ILO in a report released on Tuesday, April 7th.
The organization advocates the employment of public resources, albeit to a limited extent, to encourage job retention: “Particularly in low and middle income countries, the sectors most affected have a high percentage of casual workers or those with limited access to health and social protection services. Without appropriate policy measures, they face a high risk of poverty and will have greater challenges in restoring their livelihoods,” it says.
The organization stresses that the final account of annual job losses will depend on the evolution of the pandemic and measures to mitigate its impact.