Coronavirus is labor market economic crisis as well as health matter, says UN official
The International Labour Organization (ILO) warned Wednesday that the economic fallout from coronavirus could cause the loss of up to 25 million jobs.
In an initial assessment report of the impact of the novel virus, the ILO said: “The effects will be far-reaching, pushing millions of people into unemployment, underemployment and working poverty, and proposes measures for a decisive, coordinated and immediate response.”
However, the UN body said the impact on global unemployment could be significantly lower if there is an internationally coordinated policy response, as happened in the global financial crisis of 2008 and 2009.
“This is no longer only a global health crisis, it is also a major labor market and economic crisis that is having a huge impact on people,” said ILO Director-General Guy Ryder.
“In 2008, the world presented a united front to address the consequences of the global financial crisis, and the worst was averted. We need that kind of leadership and resolve now,” he said.
The ILO recommended urgent, large-scale, and coordinated measures that protect workers in the workplace, stimulate the economy and employment, and support jobs and incomes.
It also proposed fiscal and monetary policy measures, and lending and financial support for specific economic sectors.
Based on different scenarios for the impact of COVID-19 on global GDP growth, the ILO said its estimates indicate a rise in global unemployment of between 5.3 million (“low” scenario) and 24.7 million (“high” scenario).
That was from a base level of 188 million in 2019.
By comparison, the 2008-9 global financial crisis increased global unemployment by 22 million, said the ILO.
Underemployment was also expected to increase on a large scale, as the economic consequences of the virus outbreak translate into reductions in working hours and wages.
The ILO also warned that self-employment in developing countries, which often serves to cushion the impact of changes, may not do so this time due to restrictions on the movement of people and goods.
It said that falls in employment would also mean significant income losses for workers, and the study estimates these as being between $860 billion and $3.4 trillion by the end of 2020.
The novel virus which emerged in Wuhan, China last December has now spread to at least 164 countries and territories worldwide, with Europe as its epicenter, according to World Health Organization.
With a global death toll of over 7,800, the pandemic has brought major cities across the world to a standstill sending stocks plunging and businesses facing huge losses.