The coronavirus pandemic is ‘not only a global health crisis, but a major labour market and economic crisis’ which will push millions into unemployment, according to a leading international industry body.
Predictions by the International Labour Organisation (ILO) in Geneva suggest nearly 25 million jobs will be lost around the world as a result of the Covid-19 outbreak and its impact on businesses.
In the UK, there has already been widespread concern from the hospitality industry that businesses like pubs, restaurants and theatres will not survive the current isolation period, which is causing a dramatic drop in footfall and spending in towns and cities across the country.
Retailers too are feeling the pinch, with Laura Ashley this week becoming the first to go into administration – at a cost of 2,700 jobs – while blaming the virus impact for falling sales.
Industries like aviation and automotive manufacturing have also announced widespread shutdowns. At this time, the grounding of fleets and halting of production are described as temporary – but concern will grow as the shutdown lengthens.
The UK government has announced a £330bn package of support available to try to help businesses through this period, and plans further talks with stricken industries in the days ahead.
However, the ILO warns an internationally co-ordinated response is needed to protect the world’s economy and reduce the impact on employment.
It is calling for measures which protect workers in the workplace, stimulate economies and employment and support jobs and incomes.
This would include a wide range of financial and tax reliefs, including for micro, small and medium-sized firms, and dedicated lending and support to badly-hit sectors.
ILO projections say a successful scenario as a result of such measures would result in 5.3 million jobs being lost – whereas a failure to enact such safeguards could see that figure rise to 24.7 million.
For context, it says the 2008-09 economic downturn cost 22 million jobs.
ILO Director-General Guy Ryder said: “This is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on people.
“In 2008 the world presented a united front to address the consequences of the global financial crisis and the worst was averted. We need that kind of leadership and resolve now.”
As well as unemployment, a huge spike in underemployment is predicted, as the economic consequences of the virus outbreak translate into reductions in working hours and wages.
The ILO warns that self-employment in developing countries, which often serves to cushion the impact of changes, may not do so this time because of restrictions on the movement of people and goods.
Working poverty and income reductions are also predicted. The ILO says global income could be hit by between $869bn and £3.4trn, impacting consumption of goods and services even after the pandemic and slowing a recovery, and meaning up to 35 million more people in working on or below the poverty line.
Ruder continued: “In times of crisis like the current one, we have two key tools that can help mitigate the damage and restore public confidence.
“Firstly, social dialogue, engaging with workers and employers and their representatives, is vital for building public trust and support for the measures that we need to overcome this crisis.
“Secondly, international labour standards provide a tried-and-trusted foundation for policy responses that focus on a recovery that is sustainable and equitable. Everything needs to be done to minimize the damage to people at this difficult time.”