The coronacrisis causes more damage to the labour market than previously assumed. The ILO expects 500 million jobs worldwide to be wiped out by the crisis. The recovery will also be slower than anticipated.
According to the ILO, the number of hours worked this year is ‘significantly lower’ than previously taken into account. In the second quarter, the hours were about 17% below the level at the end of last year. This represents half a billion jobs, 100 million more than an earlier estimate in June.
The Organization estimates that the loss of income worldwide, excluding compensation for government support programmes, has so far reached $ 3,500 billion.
The situation in the second half of the year will be better than in the first half of 2020. But since June, these prospects have also deteriorated. In terms of jobs, an average scenario in the fourth quarter will lead to a loss of 245 million jobs. In the worst-case scenario, this will be a loss of 500 million jobs.
The downward adjustment partly reflects the increase in the number of infections worldwide. This means that the impact on the economy in the second half of the year will be more robust than the ILO had previously assumed. In particular, the impact of the crisis in emerging economies was highlighted.
In many of these countries there are fewer opportunities to work at home. In doing so, a reduction in long-term employment leads to inactivity, cutting people off from the labour market. According to the organisation, the crisis will also increase inequality in the world.
About the author: Matthew Johnson
Matthew Johnson, a small tech business owner retired and found his passion in journalism.