COVID-19 and world of work: Impacts and responses

Dr Salomé Teuteberg

COVID-19 and world of work: Impacts and responses

The International Labour Organisation (ILO) has released a report warning of the potential loss of up to 25 million jobs globally amid the economic effects of the COVID-19 crisis. This number is staggering. Workers in the services sector, tourism, travel and retail are the most affected. Small and medium-size enterprises (SMEs) are also at risk.

The first immediate concern is the health and safety of workers and their families. However, the consequent economic shocks will have a large impact on the world of work. The ILO notes three key impacts:

  1. The number of jobs in the job market. Estimates of how many jobs will be lost range from 5 million to 25 million. While these numbers are not clear, we can foresee that there will be significant job losses.
  2. The quality of the jobs/work available. Employers might lower wages and lower the amount of hours worked to make up for other losses. This kind of economic impact is usually curbed by self-employment or informal employment, but access to this kind of employment will be restricted with the current limitations on movement in place.
  3. The effects on vulnerable groups. Young people, women, unprotected workers, migrant workers and people with underlying health conditions are most vulnerable during this crisis.

The effects above result in a loss of labour income, which in turn results in ‘lower consumption of goods and services’. In other words, people will earn less, so people will buy less. This will have a significant impact on the retail sector, and a knock-on effect on manufacturing and other sectors.

The ILO suggests two immediate goals in terms of policy, namely health protection measures and economic support on both the demand and supply side. Social protection policies are highly recommended – including ad hoc payments for workers, wage subsidies, time-bound financial/tax relief, access to unemployment benefits and social assistance. Social dialogue between governments, workers’ organisations and employers is vital for developing sustainable solutions.

For more details on this, read the full ILO report here.

Picture credit: Kevin Sutherland

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