COVID-19 costs global economy 400 million full-time jobs, says ILO

A Journal of People report

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The COVID-19 pandemic is taking toll from the working classes. Latest data show the fact – the working people are the worst sufferers.

The International Labour Organization (ILO) forecasts: Global working hours shall plummet by 14 percent in the second quarter of 2020 as a result of the pandemic.

The ILO in an earlier projection said: A 10.7 percent fall in working hours, or 305 million job losses, for the period.

The latest forecast of fall is the equivalent to 400 million full-time job losses globally in the second quarter, based on a standard 48-hour working week. 

According to the report, the Americas were the most affected region, with an estimated 18.3 percent drop in working hours, or 70 million full-time jobs. 

The UN labor agency’s report said: There were multiple factors causing this global decline such as, shorter working hours, temporary leave — or furlough — as well as unemployment and “inactivity.”

The ILO has outlined three different scenarios for a labor market recovery in the second half of 2020. 

In its baseline model the ILO projected a 4.9 percent decline in working hours, or 140 million job losses, compared to the fourth quarter of 2019. The scenario assumed a rebound in economic activity according to existing forecasts, the lifting of workplace lockdown restrictions, in addition to a recovery in consumption and investment. 

A pessimistic scenario would see an estimated 11.9 percent fall in working hours, or 340 million job losses. That is based on an assumed second wave of the coronavirus cases, prompting the return of lockdown restrictions, therefore meaning a “significantly slow recovery.”

The optimistic model would work out at an estimated 1.2 percent decrease in working hours, or 34 million job cuts. Such a best-case scenario would be the result of workers’ activities resuming quickly, “significantly boosting aggregate demand and job creation.”

Around 2 billion people may lose jobs in the next couple of months 

A study by the Boston Consulting Group (BCG) said:

More than half of the world’s workforce (nearly two billion people) risk losing their jobs or moving to part-time work in 2020 as a result of the economic fallout from coronavirus outbreak. 

Citing estimates by the ILO, the report said: Global labor income losses will reach $3.4 trillion this year “It’s hard to overestimate the radical changes in the global workforce due to the crisis caused by the outbreak of COVID-19.”

In the next two to three months, one out of six people in the world will lose their jobs, with the unemployment rate to exceed 17 percent, said the authors of the research.

The impact of the crisis on the labor market will vary greatly across industries, with those most directly affected by quarantine measures to be hit the hardest. 

According to BCG analysis, more than 80 percent of all the layoffs in the world are likely to occur in the non-food retail sector, manufacturing, hotel and restaurant business, tourism and construction.

Automation

The BCG estimates that by 2030, automation will put 12 percent of existing jobs at risk, and about 30 percent of jobs will require completely new skills.

The study also indicated that more than 10 percent of the global workforce is highly likely to work remotely on a permanent basis, while for office workers; the figure could reach 30 percent.

The BCG said that in order to prevent the collapse of supply on the labor market, support measures should be provided by governments – from subsidizing salaries and expanding social protection to financial and tax exemptions and temporary redistribution of employment.

The BCG said: “In addition, now it is time to prepare for the after COVID-19 future, introducing in the next one to three years a common strategy for professional skills, in which retraining will be central.”

Global human development to decline for first time in 30 years due to COVID-19 

A report by the United Nations Development Program (UNDP) said: The pandemic is “unleashing a human development crisis,” with declines in fundamental areas of living standards expected to be felt worldwide. 

A combined measure of the world’s education, health and living standards, global human development is on pace to fall this year for the first time since the concept was developed by the UNDP in 1990.

According to the report, global per capita income is expected to fall four percent in 2020 while the World Bank has warned the COVID-19 outbreak could push up to 60 million people into extreme poverty.

The UNDP also cited the ILO’s predictions that half of all working people could lose their jobs over the next few months, with the virus thought to cost the global economy as much as $10 trillion. The World Food Program said 265 million people would face crisis levels of hunger in the absence of direct action.

Achim Steiner, the UNDP’s administrator said: “Without support from the international community, we risk a massive reversal of gains made over the last two decades, and an entire generation lost, if not in lives then in rights, opportunities and dignity.”

Steiner said: “The world has seen many crises over the past 30 years, including the Global Financial Crisis of 2007-09. Each has hit human development hard but, overall, development gains accrued globally year-on-year. COVID-19 – with its triple hit to health, education and income – may change this trend.”  

Developing countries and those in crisis-mode were projected to suffer the most, along with the already vulnerable.

US billionaire wealth skyrockets to over $3 trillion during pandemic 

Over the last two months, unemployment in the U.S. has risen to levels not seen since the Great Depression. However, US billionaires got even richer during the same period of the pandemic. 

A new report by Americans for Tax Fairness (ATF) and the Institute for Policy Studies showed their fortunes soared by $434 billion or 15 percent during the nation’s lockdown between mid-March and mid-May. The billionaires’ combined net worth rose from $2.948 trillion to $3.382 trillion.

The top five US billionaires—Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett and Larry Ellison—saw their wealth grow by a total of $75.5 billion, or 19 percent. Together they captured 21 percent of the total wealth growth of all 600-plus billionaires in the last two months. 

The fortunes of Amazon’s Bezos and Facebook’s Zuckerberg together grew by nearly $60 billion, or 14 percent of the $434 billion total. In March there were 614 billionaires on the Forbes list, and 630 two months later, including newcomer Kanye West at $1.3 billion. 

Tesla’s Elon Musk had among the largest percentage gain of billionaires during the two months, seeing his net worth jump by 48 percent in the period to $36 billion.

The report noted that during that same approximate period, more than 38 million working Americans lost their jobs, nearly 1.5 million Americans got infected with the virus and more than 90,000 died.

“The pandemic has revealed the deadly consequences of America’s yawning wealth gap, and billionaires are the glaring symbol of that economic inequality,” said ATF’s executive director Frank Clemente. 

According to him, Jeff Bezos’ wealth growth by $35 billion was almost the same sum that the CARES Act is spending on education programs. Mark Zuckerberg’s $25 billion growth – the same amount the CARES Act is spending on improved SNAP (Supplemental Nutrition Assistance Program or ‘food stamps’) food benefits. 

“The ‘Millionaires Giveaway’ should be immediately repealed and the $250 billion raised used to rescue struggling families and communities,” Clemente said.

Director of the IPS Program on Inequality and co-author of the Billionaire Bonanza 2020 report Chuck Collins said that the surge in billionaire wealth during a global pandemic underscores the “grotesque nature of unequal sacrifice.” 

He said: “While millions risk their lives and livelihoods as first responders and front-line workers, these billionaires benefit from an economy and tax system that is wired to funnel wealth to the top.”

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