New Delhi (NVI): The labour income across the world is estimated to have declined by 10.7 per cent or USD 3.5 trillion, in the first three quarters of this year due to the COVID-19 pandemic, the International Labour Organization (ILO) said.
“The devastating losses in working hours caused by the COVID-19 pandemic have brought a massive drop in labour income for workers around the world,” the ILO said in in its latest assessment of the effects of the pandemic on the world of work.
The global labour income is estimated to have declined by 10.7 per cent or USD 3.5 trillion, in the first three quarters of 2020, compared with the same period last year, the ILO said adding that, this figure excludes income support provided through government measures.
The ILO stated that the biggest drop was in lower-middle income countries, where the labour income losses reached 15.1 per cent, with the Americas the hardest hit region at 12.1 per cent.
The ILO Monitor: COVID-19 and the world of work. Sixth edition, says that the global working hour losses in the first nine months of 2020 have been ‘considerably larger’ than estimated in the previous edition.
Moreover, the revised estimate of global working time lost in the second quarter of this year (when compared to Q4 2019) is for 17.3 per cent, equivalent to 495 million full time equivalent (FTE) jobs, the ILO said in a statement.
Whereas, the working-hour losses are expected to remain high in the third quarter of 2020, at 12.1 per cent or 345 million FTE jobs.
The outlook for Q4 has worsened significantly since the last ILO Monitor was issued. Under the ILO’s baseline scenario, global working-hour losses are now projected to amount to 8.6 per cent in the fourth quarter of 2020 (compared to Q4 2019), which corresponds to 245 million FTE jobs. This is an increase from the ILO’s previous estimate of 4.9 per cent or 140 million FTE jobs.
The organization said a reason for the estimated increases in working-hour losses is that workers in developing and emerging economies, especially those in informal employment, have been much more affected than by past crises.
It also noted that the drop in employment is more attributable to inactivity than to unemployment, with important policy implications.
“While many stringent workplace closures have been relaxed, there are significant variations between regions. 94 per cent of workers are still in countries with some sort of workplace restrictions, and 32 per cent are in countries with closures for all but essential workplaces,” the ILO said.
The ILO further said that among countries where sufficient data is available for Q2 2020, a clear correlation exists, showing that the larger the fiscal stimulus (as a percentage of GDP), the lower the working-hour losses in the April-June quarter of this year.
So, on average, an increase in fiscal stimulus by 1 per cent of annual GDP would have reduced working-hour losses by 0.8 percentage points in this period.
“In order for developing countries to reach the same ratio of stimulus to working hours lost as in high-income countries, they would need to inject a further USD 982 billion (USD45 billion in low-income countries and USD 937 billion in lower-middle income countries),” the ILO stated.
The stimulus gap for low income countries amounts to less than 1 per cent of the total value of the fiscal stimulus packages announced by high-income countries, it added.
Guy Ryder, ILO Director-General said, “Just as we need to redouble our efforts to beat the virus, so we need to act urgently and at scale to overcome its economic, social and employment impacts. That includes sustaining support for jobs, businesses and incomes.”
“As the UN General Assembly gathers in New York, there is pressing need for the international community to set out a global strategy for recovery through dialogue, cooperation and solidarity. No group, country or region can beat this crisis alone,” he added.