Due to the coronavirus, 25 million people could be left without work in the world

The International Labor Organization (ILO) estimated on Wednesday that the coronavirus pandemic could cause up to 25 million people to become unemployed worldwide.

It did so through a report released on its website, in which it warned that this situation could be mitigated if there was a coordinated political response at the international level, as occurred in the face of the 2008-2009 global financial crisis.

The ILO report evaluates different hypotheses about the scope that Covid-19 can have and its impact on world GDP, which will inevitably affect the labor market.

Specifically, the “prudent” hypothesis of the international organization is that unemployment reaches 5.3 million pesos; while the “extreme” possibility is that it will harm 24.7 million workers, out of a total of 188 million estimated in 2019.

According to the ILO, in the crisis of 2008 and 2009, 22 million people were unemployed.

Economic impact

“An exponential increase in underemployment is also expected, since the economic consequences of the virus outbreak translate into reductions in working hours and wages. In developing countries, restrictions on the movement of people (for example, service providers) and merchandise this time may cancel the buffering effect that self-employment usually has there, ”the report added.

And also remember that less employment means big loss of earnings for workers. The study estimates that these will be between $ 860 billion and $ 3.4 billion by the end of 2020.

“This will translate into falls in the consumption of goods and services, which in turn will affect the prospects of companies and economies,” says the document.

In parallel, the ILO calculates that between 8.8 and 35 million people will be in working poverty at the end of the year, compared to the original estimate for 2020 that predicted a decrease of 14 million employees under this condition.

Policies

Against this background, the ILO calls for the adoption of “urgent, large-scale and coordinated measures based on three pillars: protecting workers in the workplace, stimulating the economy and employment, and sustaining jobs and incomes “

As specific policies, it mentions the extension of social protection, support to maintain employment (that is, short-time work, paid vacations and other subsidies) and the granting of financial aid and tax relief, in particular to micro-enterprises and small and medium-sized companies. In addition, fiscal and monetary policy measures are proposed, as well as loans and financial aid to specific economic sectors.

Panorama

“It is no longer just a global health crisis, but also a major economic and labor market crisis that is having a huge impact on people,” said ILO Director-General Guy Ryder.

“In 2008, thanks to the fact that the world made a common front in the face of the consequences of the global financial crisis, the worst was avoided. The current situation requires that kind of leadership and determination, “he added.

And he completed: “In times of crisis like the one we have to live through, we have two key tools that can help mitigate the damage and restore public confidence. First, active social dialogue between workers and employers and their representatives is vital to build public confidence and support for the necessary measures to overcome this crisis. Second, international labor standards provide a proven foundation for policy responses that focus on a sustainable and equitable recovery. ”