COVID-19 leads to massive labour income losses worldwide

Must Read

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...
- Advertisement -

A new ILO analysis of the labour market impact of COVID-19 reveals a “massive” drop in labour income and a fiscal stimulus gap that threatens to increase inequality between richer and poorer countries.

The devastating losses in working hours caused by the COVID-19 pandemic have brought a “massive” drop in labour income for workers around the world, says the International Labour Organization (ILO) in its latest assessment of the effects of the pandemic on the world of work.

COVID-19 leads to massive labour income losses worldwide
© ILO | COVID-19 leads to massive labour income losses worldwide | www.brandspurng.com

Global labour income is estimated to have declined by 10.7 per cent, or US$ 3.5 trillion, in the first three quarters of 2020, compared with the same period in 2019. This figure excludes income support provided through government measures.

The biggest drop was in lower-middle-income countries, where the labour income losses reached 15.1 per cent, with the Americas the hardest hit region at 12.1 per cent.

- Advertisement -

The ILO Monitor: COVID-19 and the world of work. The sixth edition, says that the global working hour losses in the first nine months of 2020 have been “considerably larger” than estimated in the previous edition of the Monitor (issued on 30 June).

For example, the revised estimate of global working time lost in the second quarter (Q2) of this year (when compared to Q4 2019) is for 17.3 per cent, equivalent to 495 million full-time equivalents (FTE) jobs (based on a 48-hour working week), whereas the earlier estimate was for 14 per cent or 400 million FTE jobs. In Q3 of 2020, global working hour losses of 12.1 per cent (345 million FTE jobs) are expected.

The outlook for Q4 has worsened significantly since the last ILO Monitor was issued. Under the ILO’s baseline scenario, global working-hour losses are now projected to amount to 8.6 per cent in the fourth quarter of 2020 (compared to Q4 2019), which corresponds to 245 million FTE jobs. This is an increase from the ILO’s previous estimate of 4.9 per cent or 140 million FTE jobs.

One reason for the estimated increases in working-hour losses is that workers in developing and emerging economies, especially those in informal employment, have been much more affected than by past crises, the Monitor says.

- Advertisement -

It also notes that the drop in employment is more attributable to inactivity than to unemployment, with important policy implications.

While many stringent workplace closures have been relaxed, there are significant variations between regions. 94 per cent of workers are still in countries with some sort of workplace restrictions, and 32 per cent are in countries with closures for all but essential workplaces.

Read Also:  Coronavirus: ‘Stay-at-home' Businesses Defy Market Sell-Off

The “fiscal stimulus gap”

The 6th edition of the Monitor also looks at the effectiveness of fiscal stimulus in alleviating labour market impacts.

In countries where sufficient data is available for Q2 2020, a clear correlation exists, showing that the larger the fiscal stimulus (as a percentage of GDP), the lower the working-hour losses. In that period, globally an additional fiscal stimulus of 1 per cent of annual GDP would have reduced working hour losses by a further 0.8 per cent.

- Advertisement -

However, while fiscal stimulus packages have played a significant role in supporting economic activity and reducing the fall in working hours, they have been concentrated in high-income countries, as emerging and developing economies have limited capacity to finance such measures.

Just as we need to redouble our efforts to beat the virus, so we need to act urgently and at scale to overcome its economic, social and employment impacts. That includes sustaining support for jobs, businesses and incomes.”

Guy Ryder, ILO Director-General

In order for developing countries to reach the same ratio of stimulus to working hours lost as in high-income countries, they would need to inject a further US$982 billion (US$45 billion in low-income countries and US$937 billion in lower-middle-income countries). The stimulus gap for low-income countries amounts to less than 1 per cent of the total value of the fiscal stimulus packages announced by high-income countries.

Read Also:  10 Markets That Boomed in 2020 Despite (or Because of) Covid-19

This huge “fiscal stimulus gap” is even more worrying in light of the social protection deficits in many developing countries. Moreover, some of these countries have also had to redirect public spending from other objectives in order to mitigate the labour market impact of the crisis.

“Just as we need to redouble our efforts to beat the virus, so we need to act urgently and at scale to overcome its economic, social and employment impacts. That includes sustaining support for jobs, businesses and labour incomes,” said ILO Director-General Guy Ryder.

“As the United Nations General Assembly gathers in New York, there is a pressing need for the international community to set out a global strategy for recovery through dialogue, cooperation and solidarity. No group, country or region can beat this crisis alone,” he concluded.

- Advertisement -
COVID-19 leads to massive labour income losses worldwide - Brand SpurCOVID-19 leads to massive labour income losses worldwide - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

COVID-19 leads to massive labour income losses worldwide - Brand SpurCOVID-19 leads to massive labour income losses worldwide - Brand Spur

Latest News

Allianz Risk Barometer 2021: Covid-19 trio tops global and Asia Pacific business risks

10th Allianz survey: Business interruption, Pandemic outbreak and Cyber incidents are the top three global business risks for 2021 -- all strongly interlinked. Globally, Pandemic...

VP Bank in Singapore Awarded Best Private Bank in Asian Private Banker Awards for Distinction 2020

HONG KONG SAR - Media OutReach - 18 January 2021 - VP Bank Ltd Singapore Branch has been awarded 'Best Private Bank --...

Amazon to host first Southeast Asia Seller Summit for small and medium-sized businesses to Start Local, Go Global

The two-day complimentary virtual event focuses on empowering small and medium-sized businesses to develop strategies and skills to reach more customers locally and globally SINGAPORE...

PropertyGuru Tackles Top Home Loan Refinancing Misconceptions Among Singaporeans in New Research

45% of Singaporeans feel unwise to refinance within lock-in period, a top home loan misconception hampering opportunities to save money  SINGAPORE - Media OutReach - 18 January...

Local Equities Market Falls by 0.23% amid Renewed Bearish Activity

Nigeria’s equities benchmark index fell today by 0.23% to 40,963.14 points. Year to date return and market capitalization settled at 2.02%, and N21.41 trillion...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -COVID-19 leads to massive labour income losses worldwide - Brand SpurCOVID-19 leads to massive labour income losses worldwide - Brand Spur