The labour market crisis due to the economic fallout of the COVID-19 pandemic risks far from correcting anytime soon, until at least 2023, while also exacerbating inequalities, according to a new report by the International Labour Organization (ILO)

Although employment has begun picking up, its growth will be insufficient to make up for the many job losses suffered during the period of the pandemic, the report highlights.

Meanwhile, the global crisis-induced ‘jobs gap’ will reach 75million in 2021, before falling to 23million in 2022, the report finds. Furthermore, the related gap in working-hours, which is a combination of jobs gap and those on reduced hours, amounts to the equivalent of 100million full-time jobs in 2021 and 26 million full-time jobs in 2022.

According to the ILO report, the reduction in employment and working hours ranks high among the persistently increasing pre-crisis levels of unemployment, labour underutilization and poor working conditions.

Precisely, global unemployment is expected to reach 205million people in 2022, hugely surpassing the level of 187million in 2019. This figure corresponds to an unemployment rate of 5.7 percent worldwide. With exception of the COVID-19 crisis period, such a rate was recorded also in 2013.

Regions across the world have been generally affected, and in effect, the worst affected regions in the first half of 2021 have been Latin America and the Caribbean, and Europe and Central Asia.

In the first quarter of 2021, estimated working-hour losses exceeded 8 percent and 6 percent in the second quarter of 2021. This is compared to global working-hour losses of 4.8 percent and 4.4 percent in the first quarter of 2021 and second quarter 2021, respectively.

Employment recovery to accelerate but downside risks persist

ILO projects that global employment recovery is likely to accelerate in the second half of 2021, the report indicates. But, this is based on the condition that the overall pandemic situation does not escalate.

That notwithstanding, this will be uneven, due to unequal vaccine access. And also, the low capacity of developing and emerging economies to rollout strong fiscal measures to support economies. Furthermore, the quality of newly created jobs is likely to deteriorate in those countries, the report reveals.

More so, the fall in employment and hours worked has translated into a sharp drop in labour income and a corresponding rise in poverty. Compared to 2019, an additional 108 million workers worldwide are now categorized as poor or extremely poor, living below US$3.20 per day.

“Five years of progress towards the eradication of working poverty have been undone,” the report notes, adding that this renders the achievement of the UN Sustainable Development Goal of eradicating poverty by 2030 even more elusive.

Risks of inequalities to worsen due to prolonged pandemic effect

Other risks highlighted by the report are the worsening of pre-existing inequalities among vulnerable workers due to the COVID-19 pandemic, the report finds.

Also, the widespread non-existence of social protection indicates that the pandemic-related work disruptions had had devastating consequences for incomes of families and livelihoods.

Women have also been affected disproportionately. According to the report, their employment levels declined by 5 percent in 2020 compared to 3.9 percent for men. A greater proportion of women also fell out of the labour market, becoming inactive.

Additional domestic responsibilities resulting from crisis lockdowns have also created the risk of a “re-traditionalization” of gender roles.

“Recovery from COVID-19 is not just a health issue. The serious damage to economies and societies needs to be overcome too. Without a deliberate effort to accelerate the creation of decent jobs, and support the most vulnerable members of society and the recovery of the hardest-hit economic sectors, the lingering effects of the pandemic could be with us for years in the form of lost human and economic potential and higher poverty and inequality.

“We need a comprehensive and co-ordinated strategy, based on human-centred policies, and backed by action and funding. There can be no real recovery without a recovery of decent jobs.”
Guy Rider, ILO Director-General