‘Very slow jobs recovery with high inequality risk from now onward until at least 2023 end due to COVID’

There will be a very slow jobs recovery with very high inequality risk from now onward until at least 2023 end, if employment and social trends in the first half of 2021 is of any indication. Though the global employment recovery is projected to accelerate in the second half of 2021 as per the latest assessment of the International Labour Organization (ILO), their projection heavily depends on the condition of there being no worsening of the overall pandemic situation.

As of now, there is a great uncertainty as to what is going to happen. There are many who believe there is an impending danger of yet another and more ferocious wave of COVID-19, and therefore the world still needs not only to guard against the pandemic but also the potentially scarring unemployment and working poverty rate in the near future.

Both the hope and warning that are served by the ILO flagship report "World Employment and Social Outlook (WESO): Trends 2021" must be read and understood in this context.

Slow jobs recovery and increased inequality risk long-term COVID-19 scarring, the report warned, while highlighting the danger of a COVID-19 labour market legacy of increased geographic and demographic inequality, rising poverty and fewer decent jobs.

It is a clear indication that working poverty rate is going to rise, a scenario in which many in the workforce would have to struggle to fill their stomach due to very low wage and deteriorated working conditions. Women and youth workers have been and would be worst hit. Working poverty rate has already been back to 2015 level.

Employment growth will be insufficient to make up for the losses suffered until at least 2023, warns the report. The ‘jobs gap’ will reach 75 million in 2021, before falling to 23 million in 2022. The related gap in working-hours, which includes the jobs gap and those on reduced hours, amounts to the equivalent of 100 million full-time jobs in 2021 and 26 million full-time jobs in 2022.

This shortfall in employment and working hours comes on top of persistently high pre-crisis levels of unemployment, labour underutilization and poor working conditions.

In consequence, global unemployment is expected to stand at 205 million people in 2022, greatly surpassing the level of 187 million in 2019. This corresponds to an unemployment rate of 5.7 per cent. Excluding the COVID-19 crisis period, such a rate was last seen in 2013.

The worst affected regions in the first half of 2021 have been Latin America and the Caribbean, and Europe and Central Asia. In both, estimated working-hour losses exceeded eight per cent in the first quarter and six per cent in the second quarter, compared to global working-hour losses of 4.8 and 4.4 per cent in the first and second quarter, respectively.

Even if global employment recovers in the second half of 2021, it will be uneven, asserts the report, chiefly due to unequal vaccine access and the limited capacity of most developing and emerging economies to support strong fiscal stimulus measures. Furthermore, the quality of newly created jobs is likely to deteriorate in those countries.

Until now, 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, which means they and their families live on the equivalent of less than US$3.20 per person per day.

The pre-existing inequalities have become worse, vulnerable workers have been hit harder, and the widespread lack of social protection – for example among the world’s two billion informal sector workers – have brought catastrophic consequences for family incomes and livelihoods through unprecedented disruption of work.

The crisis has also hit women disproportionately. Their employment declined by 5 per cent in 2020 compared to 3.9 per cent 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.

Globally, youth employment fell 8.7 per cent in 2020, compared with 3.7 per cent for adults, with the most pronounced fall seen in middle-income countries. The consequences of this delay and disruption to the early labour market experience of young people could last for years.

The labour market prospect relating to young people has been laid out in greater detail in another ILO brief published alongside the WESO Trends 2021. This separate update has also found gender gaps in youth labour markets that have became more pronounced.

The serious damage to economies and societies needs therefore 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,” said ILO Director-General, Guy Ryder.

“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,” he added.

Looking at working hour and direct employment losses, and foregone job growth, the WESO outlines a recovery strategy structured around four principles: promoting broad-based economic growth and the creation of productive employment; supporting household incomes and labour market transitions; strengthening the institutional foundations needed for inclusive, sustainable and resilient economic growth and development; and using social dialogue to develop human-centred recovery strategies.

(IPA Service)