The pandemic is giving the people an economic blow and around the world they are losing their jobs in large numbers.
Large gatherings are cancelled and people undertake social distancing, making it impossible for many businesses to continue. An epidemic anywhere can be a threat to people everywhere. That’s true now with COVID-19, and it was true in 2014, when the Ebola virus was spreading like wildfire across Liberia and West Africa.
Based on different scenarios for the impact of COVID-19 on global GDP growth the International Labour Organisation (ILO) estimates indicate a rise in global unemployment of between 5.3 million and 24.7 million from a base level of 188 million in 2019. It also suggests an increase of 13 million in high income countries.
The current decline in economic activity and constraints on people’s movements is impacting both manufacturing and services. While self-employment does not typically react to economic downturns, it acts as a “default” option for survival or maintaining income – often in the informal economy.
For this reason, informal employment tends to increase during crises. However, the current limitations on the movement of people and goods may restrict this type of coping mechanism. The services sector, tourism, travel and retail are especially vulnerable.
An initial assessment by the World Trade and Tourism Council forecasts a decline in international arrivals of up to 25 per cent in 2020, which would place millions of jobs at risk. Working poverty is also likely to increase significantly. The strain on incomes resulting from the decline in economic activity will devastate workers close to or below the poverty line.
The growth impacts of the virus used for the unemployment estimates above suggest an additional 8.8 million people in working poverty around the world than originally estimated. Under the mid and high scenarios, there will be between 20.1 million and 35.0 million more people in working poverty than before the pre-COVID-19.
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