The labour agency expects Covid-19 impact to be worse than the 2008/09 financial crisis.
The International Labour Organisation (ILO) released a report stating that Covid-19 would have a catastrophic impact on the global economy, wiping out 6.7 per cent of working hours globally in the second quarter of 2020 - an amount equivalent to 195 million full-time jobs.
The report describes the pandemic as “the worst global crisis since World War II”, and explains that the largest workforce reductions are foreseen in the Arab States (8.1 per cent, equivalent to 5 million full-time workers), Europe (7.8 per cent, or 12 million full-time workers) and Asia and the Pacific (7.2 per cent, or 125 million full-time workers).
The most affected individuals are those in upper-middle-income countries, which is expected o shed 7 percent or 100 million full-time workers. According to the new study, 1.25 billion workers are employed in the sectors identified as being at high risk of “drastic and devastating” increases in layoffs and reductions in wages and working hours. Many are in low-paid, low-skilled jobs, where a sudden loss of income is devastating.
Regionally, the proportion of workers in these “at-risk” sectors varies from 43 per cent in the Americas to 26 per cent in Africa. Some regions, particularly Africa, have higher levels of informality, which combined with a lack of social protection, high population density and weak capacity, pose severe health and economic challenges for governments.
The four sectors that experienced the most drastic effects of the disease are food and accommodation (144 million workers), retail and wholesale (482 million); business services and administration (157 million); and manufacturing (463 million).
Together, they contribute up to 37.5 per cent of global employment and this is where the sharp end of the impact of the pandemic is being felt now, said ILO chief Director-General Guy Ryder in Geneva via videoconference last Tuesday. He said that, before at the start of the year, before the outbreak intensified, the global unemployment already stood at around 190 million, a figure that will increase quite significantly this year.
In South Africa, the Reserve Bank has forecasted about 370 000 jobs losses in 2020 alone, with business insolvencies increasing by roughly 1 600 firms as the economy contracts. The central bank also expects to the economy to contract by between 2 percent and 4 percent, while growth is unlikely to exceed 1 percent next year.