255 Million Jobs lost Worldwide due to Coronavirus Pandemic

255 Million Jobs lost Worldwide due to Coronavirus Pandemic

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Globe Live Media, Monday, January 26, 2021

The global economy will not be able to fully repair the damage to work happened in 2020 after the coronavirus pandemic eliminated the equivalent of 255 million jobs, according to International Labor Organization (ILO).

Even under the most optimistic projections, working hours will remain lower compared to pre-crisis levels, the ILO noted in a report.

Under the organization’s reference scenario, the global economy will close this year with the equivalent of 90 million fewer full-time jobs than before the outbreak, as reported by the Bloomberg news agency.

In a pessimistic scenario, where vaccination progress is slow and the impact of the pandemic is prolonged, losses in the labor market will remain at that level in 2021

The signs of recovery we see are encouraging, but they are fragile and highly uncertain” said the Director General of the ILO, Guy Ryder. “We must remember that no country or group can recover alone,” he added.

The damage caused by the pandemic in 2020 is unprecedented and is roughly four times greater than that of the 2009 financial crisis, according to the ILO.

However, losses in the third quarter were less dramatic than previously estimated, following a strong economic rebound. The 4.6% reduction in work hours in the fourth quarter, equivalent to 130 million full-time jobs, was also lower than a previous projection.

In a pessimistic scenario, where vaccination progress is slow and the impact of the pandemic is prolonged, losses in the labor market will remain at that level in 2021.

The damage caused by the pandemic in 2020 is unprecedented and is approximately four times greater than that of the 2009 financial crisis, according to the ILO

The outlook highlights the contrast between the worst-hit sectors, such as hospitality, arts and retail, which suffered “massive” damage, and highly-skilled service sectors that even saw job growth.. Among those most affected are women, youth, independent workers and low-skilled workers, the ILO said.

There are “serious concerns” that this could translate into an uneven recovery, where “workers and businesses that have been hard hit by the crisis will benefit less from an improvement in economic conditions,” the report added.

Impact on employment in Argentina

Men and women up to 29 years of age, with low educational levels and with informal jobs were the most affected in the country by the fall in the employment rate registered during 2020 as a consequence of the economic crisis resulting from the pandemic and the isolation measures, according to a study carried out by CIPPEC.

For the third quarter of the year, the latest official data available, men up to 29 years of age suffered the greatest drop in the inter-annual employment rate, 17%, followed by women of the same age group, with 11%.

The fall in employment and activity, especially in the informal world, leads to an economic recession and an increase in poverty. EFE / Juan Ignacio Roncoroni

The fall in employment and activity, especially in the informal world, leads to an economic recession and an increase in poverty.
 

At the same time, the fall in employment affected workers with the lowest qualifications to a greater extentthe report stated.

Likewise, it indicated that those with incomplete primary education reduced their employment by 28%, while those with university studies did so by 7.6%, year-on-year.

For the third quarter of the year, the latest official data available, men up to 29 years of age suffered the greatest drop in the interannual employment rate, 17%, followed by women of the same age group, with 11%

He also added that there was a great variation according to the type of labor insertion. In that sense, he stressed that formal salaried employment fell by 5.2% year-on-year, while informal salaried employment fell 30 percent.

These data are part of the document “The labor market in Argentina: structure, impact of COVID-19 and lessons for the future”, produced by Manuel Mera, Matilde Karczmarczyk and Luciana Petrone, researcher, coordinator and analyst of the CIPPEC Social Protection Program, which analyzes the structure of the Argentine labor market, the impact of the slowdown on economic activity during 2020, and proposes guidelines to promote employment in the context of economic and health crisis.

“Argentina has structural problems in its labor market, with great heterogeneity by sector, type of labor insertion and population. It is on this structure that we must evaluate the effect of COVID-19 ”, stated Manuel Mera.

The study revealed that the year-on-year drop (as of October 2020) was 241,200 jobs, of which 243,500 were salaried.

Meanwhile, he explained that when focusing on the jobs that were lost due to the pandemic, using seasonally adjusted data, the total fall in formal employment was 187,100 jobs between February and October, most of which (185,200) occurred in registered employees.

Two issues stand out from these numbers. On the one hand, the increase in the fall in employment is not due to an increase in dismissals, but to a historical drop in incorporations. It should be borne in mind that there is currently a ban on dismissals and double severance pay. The implication of this is that the formal labor market is at a standstill, and that lack of dynamism leads to a slow but constant fall in employment, ”the work indicated.

And he added that secondly, the barriers to dismissal of formal workers led to the use of alternative mechanisms to dismissal.

According to CIPPEC, The data shows a significant increase in the suspension rate, which reached 8.84 in May and fell to 3.85 in November.

The document also analyzes the variations in the number of employers according to size. In the period March – June 2020, the number of employers fell by nearly 15,000 (-3%) for the month of June 2020. The concentration of the year-on-year fall was to a greater extent among micro-companies (74.5% of total casualties), companies with up to 10 workers (9.7%), companies between 11 and 50 workers (10.3%) and companies with more than 50 workers (5.5%).

“The data on the situation of production and the labor market at the beginning of 2020 and the deepening of the crisis generated by COVID-19 show a worrying social and economic scenario. The fall in employment and activity, especially in the informal world, leads to an economic recession and an increase in poverty. Faced with this panorama, it is necessary to think about a battery of actions to favor a recovery, ”the document highlighted.

Finally, he affirmed that among the possible actions are mechanisms to support and promote the labor market, such as wage subsidies, unemployment insurance and the agreed reduction of hours worked for the formal, as well as conditional transfers for the unemployed and informal.

Ben Oakley
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