Women, young people and the 2 billion people working in informal sectors have been hardest hit
The labour market crisis created by the Covid-19 pandemic is far from over, and employment growth will be insufficient to make up for the losses suffered until at least 2023, said a new assessment by the International Labour Organization (ILO) released on Wednesday.
The ILO’s World Employment and Social Outlook: Trends 2021 (WESO Trends) projects the global crisis-induced "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%. 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 8% in the first quarter and 6% in the second quarter, compared to global working-hour losses of 4.8% and 4.4% in the first and second quarter, respectively.
Global employment recovery is projected to accelerate in the second half of 2021, provided that there is no worsening in the overall pandemic situation.
However this will be uneven, 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.
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 (meaning they and their families live on the equivalent of less than US$3.20 per person per day).
“Five years of progress towards the eradication of working poverty have been undone,” the report says, adding that this renders the achievement of the UN Sustainable Development Goal of eradicating poverty by 2030 even more elusive.
The crisis has also hit women disproportionately. Their employment declined by 5% in 2020 compared to 3.9% for men.
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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% in 2020, compared with 3.7% 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 pandemic’s impact on young people’s labour market prospects is laid out in greater detail in an ILO brief published alongside the WESO Trends.
The Update on the youth labour market impact of the Covid-19 crisis also finds that gender gaps in youth labour markets became more pronounced.
“Recovery from Covid-19 is not just a health issue. The serious damage to economies and societies needs to be overcome too,” 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 said.