“The crisis has uncovered the huge decent work deficits that still prevail in 2020 and shown how vulnerable millions of working people are when a crisis hits.” – ILO Director-General

20 April 2020 — As the coronavirus pandemic wreaks havoc on labour markets worldwide, the United Nations is calling for a global response to match the scale of the crisis, while countries roll out emergency stimulus packages to support livelihoods.

COVID-19 has disrupted billions of lives and endangered the global economy. The International Monetary Fund (IMF) has announced a global recession, and the International Labour Organization (ILO) expects working hours equivalent to 195 million full-time workers to be lost globally in the second quarter of 2020, with workers losing as much as $3.4 trillion in income by the end of 2020. Full or partial lockdown measures are now affecting almost 2.7 billion workers, representing around 81 per cent of the world’s workforce.

As a result, businesses across a range of economic sectors are facing catastrophic losses, threatening their solvency, while millions of workers are vulnerable to layoffs.  The impact on income-generating activities is especially harsh for unprotected workers and the most vulnerable groups in the informal economy.

The final tally of annual job losses in 2020 will depend critically on the evolution of the pandemic and the measures taken to mitigate its impact.  As it stands, the global number of unemployed at the end of 2020 could be significantly higher than initial projections of 25 million job losses, the agency says.

“The crisis has uncovered the huge decent work deficits that still prevail in 2020 and shown how vulnerable millions of working people are when a crisis hits,” said ILO Director-General Guy Ryder in a written statement delivered to the Spring Meetings of the IMF and World Bank on 17 April.

Tourism is among the hardest-hit industries. As of 6 April, 96 per cent of all worldwide destinations have introduced travel restrictions in response to the pandemic.

“COVID-19 has impacted travel and tourism like no other event before in history,” said Zurab Pololikashvili, Secretary-General of the United Nations World Tourism Organization (UNWTO). “With tourism suspended, the benefits the sector brings are under threat: millions of jobs could be lost, and progress made in the fields of equality and sustainable economic growth could be rolled back.”

He called on Governments to continuously review travel restrictions and ease or lift them as soon as it is safe to do so.

4-Pillar Response

Mr. Ryder of ILO has laid out a four-pillar plan of policy responses to the COVID-19 crisis, that are human-centred and built on global solidarity.

Firstly, stimulating the economy and demand for labour by using available fiscal and monetary tools and debt relief. Public investment in health systems would be doubly effective as a crucial contribution to beating the pandemic and creating decent jobs.

Secondly, providing immediate assistance to sustain enterprises, preserve jobs and support incomes. In this context, Mr. Ryder highlighted the particular need to invest in social protection measures, which can help mitigate the worst shocks of the crisis while acting as an economic stabiliser.

Thirdly, ensuring adequate protection for all those who continue to work during the crisis. That requires guarantees for safety and health in the workplace, properly designed work arrangements such as teleworking, and access to sick pay.

Fourthly, making full use of social dialogue between governments, and workers and employers’ organisations, which has a proven record of generating effective, practical, and equitable solutions to the type of challenges now confronting the world of work.

Country Responses

The United Nations has called for a large-scale, coordinated and comprehensive multilateral response amounting to at least 10 per cent of global gross domestic product (GDP). Around the world, Governments have announced measures to cushion the socioeconomic impact of COVID-19.

The United States enacted a measure on 27 March that includes $2.2 trillion in supplemental appropriations to respond to the COVID-19 outbreak - the third and largest stimulus package passed by Congress to tackle the crisis.  It provides small businesses and non-profits comprised of 500 or fewer employees with almost $350 billion in partially forgivable loans.  The United States Federal Reserve has lowered interest rates to zero and announced it would buy at least $700 billion in Government and mortgage-related securities.

Man with face mask in empty subway car.

Japan has responded to the impact of COVID-19 with a package of ¥108 trillion (about $1 trillion) - equivalent to 20 per cent of the nation’s GDP - to protect lives and livelihoods and move the nation towards post-crisis economic recovery.  The package includes cash payments to households, and small- and medium-size businesses.

China’s measures include support for businesses involved in medical supply, transport and daily supply, as well as comprehensive tax measures for enterprises, individuals and social organizations.

France’s emergency plan has been revised upwards to 110 billion euros, roughly 5 per cent of the country’s GDP.

The United Kingdom has made £330 billion of loans and guarantees available to businesses, equivalent to 15 per cent of its GDP.

In Brazil, the Central Bank made BRL 1.2 billion available to increase the liquidity of the financial system, equivalent to 16.7 per cent of GDP.

Nigeria has created a NGN50 billion (about $136.6 million) credit facility to support households and small- and medium-sized enterprises that have been particularly hit by COVID-19, including hoteliers, airline service providers and health care merchants.

The UN Secretary-General has called on wealthier countries to design fiscal and monetary responses to ensure that the burden does not fall on those countries who can least bear it.

In Nepal, where 16 COVID-19 cases have been officially confirmed so far, the United Nations team has launched a country preparedness and response plan requiring $38.23 million for humanitarian relief and initial essential social and economic recovery interventions.

The UN team is also working on short- and long-term crisis recovery to mitigate the impact of the lockdown, including on livelihoods and the return of migrants. International financial institutions have presented their support plans to Nepal, which include $29 million in concessional loans from the World Bank, $20 million from the Asian Development Bank and $113 million from the International Monetary Fund’s credit facility.

Balancing Act

As some countries consider easing restrictions, World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus says lifting restrictions too quickly could lead to a deadly resurgence of COVID-19.

WHO is working with countries on strategies for gradually and safely easing these measures and recommends that six conditions be met. First and foremost, transmission must be controlled.  Sufficient public health and medical services must be available, with the risks of outbreak in special settings – such as long-term care facilities - minimized.  Preventive measures also should be in place in workplaces, schools and other places where it is essential for people to go.  It is also vital that importation risks can be managed, and that communities are fully aware and engaged in the transition.

“Every single person has a role to play in ending this pandemic,” he said.