The economic impacts of Covid-19 on the global workforce are becoming worse than the 2008 financial crisis. With a 195 million full-time job loss forecast in the next three months, the International Labor Organization (ILO) signals the most grave labor crisis since World War II.
According to ILO’s forecast, the COVID-19 crisis is expected to wipe out 6.7 percent of working hours globally in the second quarter of 2020 – equivalent to 195 million full-time workers: large impact on the Arab States (8.1 percent, equivalent to 5 million full-time workers), Europe (7.8 percent, or 12 million full-time workers) and Asia Pacific (7.2 per cent, 125 million full-time workers). The sectors most at risk include accommodation and food services, manufacturing, retail, and business and administrative activities.
“Workers and businesses are facing catastrophe, in both developed and developing economies… We have to move fast, decisively, and together. The right, urgent, measures, could make the difference between survival and collapse.” states The International Labor Organization (ILO) Chief, Guy Ryder in a press release on April 7th.
ILO emphasizes the need for large-scale, integrated, policy measures, focusing on four pillars: supporting enterprises, employment and incomes, stimulating the economy and jobs, protecting workers in the workplace, and using social dialogue between government, workers and employers to find solutions.
As a response to the labor crisis due to the virus, ILO recommends adopting a multi-track approach enabling recovery and building resilience, conform with international labor standards, based on the Employment and Decent Work for Peace and Resilience Recommendation, 2017:
- stabilizing livelihoods and income through immediate social protection and employment measures;
- promoting economic recovery for employment and decent work
- opportunities and socio-economic reintegration;
- promoting sustainable employment and decent work, social protection and social inclusion, sustainable development, the creation of sustainable
- enterprises, in particular small and medium-sized enterprises, the transition from the informal to the formal economy, a just transition towards an environmentally sustainable economy and access to public services;
- conducting employment impact assessments of national recovery programmes;
- providing guidance and support to employers to enable them to take effective measures to identify, prevent, mitigate and account for how they address the risks of adverse impacts on human and labour rights in their operations, or in products, services or operations to which they may be directly linked;
- promoting social dialogue and collective bargaining;
- building or restoring labour market institutions, including employment services, for stabilization and recovery;
- developing the capacity of governments, including regional and local authorities, and of employers’ and workers’ organizations; and taking measures, as appropriate, for the socio-economic reintegration of persons who have been affected by a crisis, including through training programmes that aim to improve their employability.
Please refer to the ILO Standards and Covid -19 FAQ document for the full text.
A few keywords emerge from ILO’s approach to battle against the global pandemic: social dialogue, sustainability and integrated response on national and global levels. This battle has two obvious fronts: the health front and the economic front.
Parallel to ILO’s proposed policies, Alanna Shaikh, a renowned global health expert, with 20 years of technical specialty in health systems, focuses on Covid-19 as a health crisis in her recent TED talk. She talks about Covid-19 as one of the epidemics we will be seeing because of the way we, humans, interact with nature. Although necessary acute measures, Shaikh doesn’t see quarantines and travel restrictions as solutions to fight against the virus for long haul, but believes in building the global health system to support core health care functions in every country in the world so that all countries, even poor ones, are able to rapidly identify and treat new infectious diseases as they emerge.
The duration of the health front will have a significant impact on the magnitude of the economic front. Many businesses will dissolve, many sectors will diminish in size, many people will be unemployed due to direct or indirect impacts of the coronavirus. There will be social and psychological consequences of these economic impacts on a global level. Covid-19 will most likely change our perceptions and expectations of pre-2020 and permanently establish a new normal for governments, businesses, citizens and employees.
Ela EROZAN GÜRSEL