A new ILO analysis of the labour market impact of COVID-19 reveals a “massive” drop in labour income and a fiscal stimulus gap that threatens to increase inequality between richer and poorer countries.
The devastating losses in working hours caused by the COVID-19 pandemic have brought a “massive” drop in labour income for workers around the world. Global labour income is estimated to have declined by 10.7 per cent, or US$ 3.5 trillion, in the first three quarters of 2020, compared with the same period in 2019. This figure excludes income support provided through government measures.
The outlook for Q4 has worsened significantly since the last ILO Monitor was issued. Under the ILO’s baseline scenario, global working-hour losses are now projected to amount to 8.6 per cent in the fourth quarter of 2020 (compared to Q4 2019), which corresponds to 245 million Full Time Equivalents (FTE) jobs. This is an increase from the ILO’s previous estimate of 4.9 per cent or 140 million FTE jobs. One reason for the estimated increases in working-hour losses is that workers in developing and emerging economies, especially those in informal employment, have been much more affected than by past crises.
ILO Global Monitor on COVID-19 and the world of work_6th edition also notes that the drop in employment is more attributable to inactivity than to unemployment, with important policy implications.