While the proportion of workers living in countries with recommended or required workplace closures decreased from 81 to 68 percent, mainly driven by the lifting of shutdown closures in China, the situation has worsened elsewhere.
As of April 22, 81 percent of employers and 66 percent of own-account workers live and work in countries affected by recommended or required workplace closures, with severe impacts on incomes and jobs, said International Labour Organization.
According to the ILO nowcasting model, global working hours declined in the first quarter of 2020 by an estimated 4.5 percent (equivalent to approximately 130 million full-time jobs, assuming a 48-hour working week), compared to the pre-crisis situation (fourth quarter of 2019).
Global working hours in the second quarter are expected to be 10.5 percent lower than in the last pre-crisis quarter. This is equivalent to 305 million full-time jobs, which represents a significant deterioration on ILO’s previous estimate of 195 million for the second quarter.
This has been driven mainly by prolongation and extension of containment measures.
While the situation has worsened for all major regional groups, estimates indicate that the Americas (12.4 percent) and Europe and Central Asia (11.8 percent) will experience the greatest loss in working hours.
Own-account workers are those workers who, working on their own account or with one or more partners, hold the type of jobs defined as “self-employment jobs”, and have not engaged on a continuous basis any employees to work for them, income groups, lower-middle-income countries are expected to register the highest rate of
hours lost, at 12.5 percent, but the impact is comparable across countries with different levels of income.
Taking together employers and own-account workers, around 436 million enterprises in the hardest-hit sectors worldwide are currently facing high risks of serious disruption.
More than half of these - some 232 million - are in wholesale and retail trade, currently one of the most impacted sectors globally. Own-account workers represent 45 percent of employment in this segment.
Own-account workers and small enterprises together account for more than 70 percent of global employment in retail trade and nearly 60 percent in the accommodation and the food services sector, a reflection of the severe the vulnerability of these sectors in the present economic crisis.
Among the most vulnerable in the labor market, almost 1.6 billion informal economy workers are significantly impacted by lockdown measures and/or working in the hardest-hit sectors.
The first month of crisis is estimated to result in a decline in earnings of informal workers of 60 percent globally. By region, the expected decline is largest in Africa and Latin America, ILO Monitor: COVID-19, and the world of work. Third edition 2
at 81 percent.
The ILO calls for urgent and significant policy responses to protect both enterprises,
particularly smaller businesses, and workers, especially those operating in the informal economy.
Lockdown continues to severely impact enterprises and workers around the globe
The worst global crisis since the Second World War, the Covid-19 pandemic continues to severely affect public health and cause unprecedented disruptions to economies and labour markets.
Since the release of the second edition of the ILO Monitor on 7 April, global COVID-19 infections have more than doubled to reach nearly 2.6 million on 22 April 2020, while the number of deaths has more than tripled, approaching 180,000 worldwide.
As the pandemic evolves, so do measures taken by governments to tackle it. The second ILO Monitor found that on 1 April 2020, 81 percent of all workers lived in countries with recommended or required workplace closures.
The most recent ILO estimates show that this share has gone down to (a still striking) 68 percent. This decline is mainly driven by the lifting of workplace closures in China beginning in early April.
However, the situation has worsened elsewhere, and 64 additional countries have adopted recommended or required workplace closures since 1 April, most of them in Africa, Europe and Central Asia, and the Americas.
Workplace closures have an immediate and severe impact on enterprises’ and own-account workers’ current operations and leave them at high risk of insolvency. Even once containment measures are lifted, surviving enterprises and own-account workers will continue to face challenges given that recovery is expected to be uncertain and slow. For those that are engaged in global supply chains, disruptions are likely along with the forward and backward linkages of the chain as other countries continue to face reductions in economic activity.
Restarting businesses will require significant adjustments with cost implications,
including securing safe work environments. Unless tackled by effective policies, these new requirements are likely to put a severe constraint on businesses.
International coordination on stimulus packages is critical to make the global recovery more effective and sustainable. As called for by the UN Secretary-General, the international community can play a decisive role in supporting countries with very limited fiscal space by providing liquidity and financial assistance and by relieving or postponing the payment of foreign debt.
Tailored responses are needed to reach and support small businesses, through combined measures of direct financial support and loan guarantees to avoid saddling firms with too much debt (but conditional on retaining workers).
Preparedness to identify and expand financial resources is therefore essential to deal with high demand for lines of credit.
For small businesses, microfinance and semi-formal financial institutions can constitute an effective means of reaching enterprises and own-account workers operating in the informal economy.
In the reactivation phase, policies should target the provision of timely information about the status of containment measures and exit strategies. Exit from containment should take advantage of social dialogue to ensure that reopening
of workplaces occurs with safeguards for the safety of workers and consumers.
Many sectors will require governments to coordinate the distribution of essential inputs to firms and provide support to reprogramming production towards the health sector and essential products and services.
Longer-term, large public investments are needed to boost employment and crowd in private investment. Governments could accelerate economic growth and boost employment with measures such as employment-intensive public investment, government procurement that provides preferences to small businesses, and tax incentives to stimulate local sourcing of larger firms.
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