On April 8, the United Nations released a report to highlight the “catastrophic consequences” of the Coronavirus on the informal sector in India. According to the UN’s labour body, 400 million workers are expected to sink into poverty, since the crisis is “expected to wipe out 195 million full-time jobs or 6.7% of working hours in the second quarter” of 2020.
The International Labour Organization (ILO)’s report titled ‘ILO Monitor 2nd Edition: COVID-19 and the world of work’ describes the Coronavirus outbreak as, “the worst global crisis since World War II.”
“Workers and businesses are facing catastrophe, in both developed and developing economies. We have to move fast, decisively, and together,” ILO Director-General Guy Ryder said on Tuesday. The right, urgent, measures, could make the “difference between survival and collapse,” he said.
Worldwide, two billion people work in the informal economy, mostly in emerging and developing economies. They are specifically at risk, the report said, adding that the COVID-19 crisis is already affecting tens of millions of informal workers.
“In India, Nigeria, and Brazil, the number of workers in the informal economy affected by the lockdown and other containment measures is substantial,” the ILO report said.
With a share of approximately 90% of people working in the informal sector, about 400 million workers are at risk of falling deeper into poverty during the plight. “Current lockdown measures in India, which are at the high end of the University of Oxford’s COVID-19 Government Response Stringency Index, have impacted these workers significantly, forcing many of them to return to rural areas,” it said.
“This is the greatest test for international cooperation in more than 75 years. If one country fails, then we all fail. We must find solutions that help all segments of our global society, particularly those that are most vulnerable or least able to help themselves,” said Ryder.
“The choices we make today will directly affect the way this crisis unfolds and so the lives of billions of people. With the right measures we can limit its impact and the scars it leaves. We must aim to build back better so that our new systems are safer, fairer and more sustainable than those that allowed this crisis to happen,” he said.
Large depletions are foreseen in the Arab States (8.1%, equivalent to 5 million full-time workers), Europe (7.8%, or 12 million full-time workers) and Asia and the Pacific (7.2%, 125 million full-time workers), said the report.
Huge losses are expected to arise across different income groups, especially in upper-middle-income countries (7.0%, 100 million full-time workers), far exceeding the effects of the 2008-9 financial crisis, the report warned.
“The COVID-19 pandemic is having a catastrophic effect on working hours and earnings, globally,” it said.
The agency also said that sectors most at risk include accommodation and food services, manufacturing, retail, and business, as well as administrative activities.
The gradual increase in global unemployment during 2020 will depend substantially on future developments and policy measures. There is a great risk of the end-of-year figure being significantly higher than the initial ILO projection of 25 million, it said.
More than four out of five people, i.e. 81% people, in the global workforce of 3.3 billion are currently affected by full or partial workplace closures, it said.
As per the report, 1.25 billion workers are employed in the sectors identified as being at high risk of “drastic and devastating” increases in layoffs and reductions in wages and working hours. Many people are currently in low-paid, low-skilled jobs, where a sudden loss of income is devastating.
Looked at regionally, the proportion of workers in these “at-risk” sectors varies from 43% in the Americas to 26% in Africa. Some regions are said to have higher levels of informality, which combined with a lack of social protection, high population density and weak capacity, pose severe health and economic challenges for governments, the report cautions.
Moreover, large-scale, integrated, policy measures were needed, 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, the study reiterated.