Coronavirus pandemic is likely to create an economic and labor crisis where 25 million people could be rendered jobless globally, according to the International Labor Organization (ILO).
In the new assessment, ILO estimates that due to the Covid19 outbreak, global unemployment of between 5.3 million (“low” scenario) and 24.7 million (“high” scenario) from a base level of 188 million in 2019 could be witnessed.
Since the outbreak of the Covid19, the global economy has been forced to depression with the movement of people and goods being restricted.
Countries have closed borders, suspended flights to other countries, shut down businesses and major towns while advising people to work from home as precautions to prevent the spread of coronavirus.
Most companies depend on the movement of people to provide services and transport goods from one place to another. Restrictions due to the coronavirus outbreak mean that the movement has been reduced and having an impact on the supply of goods and services to these companies.
The economic consequences of the virus outbreak translate into reductions in working hours and wages.
ILO argues that Self-employment in developing countries, which often serves to cushion the impact of changes, may not do so this time because of restrictions on the movement of people (like service providers) and goods.
Working poverty is likely to rise significantly due to “the strain on incomes resulting from the decline in economic activity will devastate workers close to or below the poverty line.”
According to the estimates by ILO, between 8.8 and 35 million additional people will be in working poverty worldwide, compared to the original estimate for 2020 (which projected a decline of 14 million worldwide)
Due to the high rate of unemployment to be brought about by the pandemic, workers are likely to lose millions of income.
“The study estimates these as being between 860 billion US dollars and 3.4 trillion US dollars by the end of 2020. This will translate into falls in consumption of goods and services, in turn affecting the prospects for businesses and economies.”
In its assessment, ILO suggests that an internationally coordinated policy response is required to minimize global unemployment to a significant level.
Different countries should put in place proper measures to curb this situation like those applied during the global financial crisis of 2008/2009.
“These measures include extending social protection, supporting employment retention (short-time work, paid leave, other subsidies), and financial and tax relief, including for micro, small and medium-sized enterprises,” ILO suggested.
The covid19 has now infected over 200,000 people and is responsible for over 8,000 deaths globally. Over 84,000 people have recovered from the infection.