Pandemic impact on jobs, worse than expected: ILO

The jobs recovery is stalled worldwide and disparities between advanced and developing economies threaten the whole global economy, warned the International Labour Organization (ILO) on Wednesday.

The agency is projecting that global hours worked this year will be 4.3 per cent below pre-pandemic levels, the equivalent of 125 million full time jobs. This is a dramatic revision of the projection made in June, of 3.5 per cent or 100 million full-time jobs.

The eighth edition of the ILO Monitor: COVID-19 and the world of work also warns of a “great divergence” between developed and developing countries, saying it will persist without concrete financial and technical support.

Regional differences

In the third quarter of 2021, total hours worked in high-income countries were 3.6 per cent lower than the fourth quarter of 2019, before the pandemic hit.

By contrast, the gap in low-income countries stood at 5.7 per cent and in lower middle-income countries at 7.3 per cent.

From a regional perspective, Europe and Central Asia experienced the smallest loss in hours, around 2.5 per cent. This was followed by Asia and the Pacific at 4.6 per cent.

Africa, the Americas and Arab States showed declines of 5.6, 5.4 and 6.5 per cent respectively.

Vaccines and fiscal stimulus

This great divergence is largely driven by major differences in the roll-out of vaccinations and fiscal stimulus packages.

Estimates indicate that for each 14 persons fully vaccinated in the second quarter of 2021, one full-time equivalent job was added to the global labour market. This substantially boosted the recovery.

In the absence of any vaccines, globally, the loss in hours worked would have stood at six per cent in the second quarter of 2021, rather than the 4.8 per cent recorded.

The highly uneven vaccine roll out, means that the effect was largest in high-income countries, negligible in lower middle-income countries and almost zero in low-income countries.

According to ILO, these imbalances could be rapidly addressed through greater global solidarity in respect of vaccines. 

The agency estimates that if low-income countries had more equitable access to vaccines, working-hour recovery would catch up with richer economies in just over one quarter.

Uneven stimulus

Fiscal stimulus continued to be the other key factor in the trajectories of recovery. However, the gap remains largely unaddressed, with around 86 per cent of all measures concentrated in high-income countries.

On average, an increase in fiscal stimulus of one per cent of annual GDP increased annual working hours by 0.3 percentage points relative to the last quarter of 2019.

The crisis has also impacted productivity, leading to greater disparities. The productivity gap between advanced and developing countries is projected to widen to the highest level since 2005. 

ILO Director-General, Guy Ryder, highlighted the unequal vaccine distribution and fiscal capacities saying that “both need to be addressed urgently.”

He pointed to the Global Call to Action for a human-centred COVID-19 recovery, a roadmap adopted last year by the International Labour Conference that commits countries to ensuring that their recovery is fully inclusive, sustainable and resilient.

“It is time to implement this roadmap, which is fully aligned with and supports the UN’s Common Agenda and its Global Accelerator for Jobs and Social Protection,” Mr. Ryder said.