IOE assessment of the ILO’s latest analysis on the impact of COVID-19 in the world of work.
The sixth edition of the ILO Monitor on COVID-19 and the world of work was published on 23 September with updated estimates and analysis on:
- labour market developments (workplace closures, working-hour losses and labour income losses),
- policy impacts and gaps (effectiveness of fiscal stimulus in mitigating labour market disruptions and “stimulus gap” in low and middle-income countries).
IOE highlights below some of the most relevant information in the Monitor for employer organisations and their members as they contribute to national recovery strategies. We also provide our assessment on some of the findings and recommendations from this edition.
- Overall, the lockdown situation has been stable regarding “recommended workplace closures”. The latest developments in the sub-category of most stringent measures (“required workplace closures for all but essential workplaces”) vary tremendously across regions. Reflecting the resurgence of the pandemic in many countries, the declining trend evident from April stopped in late June before the share increased modestly during the second quarter. However, this is not the case in low-income countries, where, despite increasing numbers of cases, stringent lockdowns have proven to be unsustainable.
- Developments in workplace closures contributed to larger than expected labour market disruptions (working-hour losses). In fact, according to the publication, the estimated total working-hour losses in the second quarter of 2020 are revised upward to an equivalent of 495 million full-time equivalent (FTE) jobs, from the previously estimated 400 million FTE jobs reported in the fifth edition of the ILO Monitor.
- Policy responses: the reports stresses what the IOE position has been since the beginning of the pandemic: The need for sustained and agile policy responses to limit the damage on businesses and livelihoods including through effective fiscal stimulus to mitigate labour market disruptions.
According to the ILO figures, on average, “an increase in fiscal stimulus of 1 per cent of annual GDP would have reduced working-hour losses by 0.8 percentage points in the second quarter of 2020. In the absence of any fiscal stimulus, global working-hour losses would have been as high as 28 per cent”.
- The ILO calls, among others, on finding a right balance and sequence of health and economic and social policy interventions utilizing social dialogue as an effective mechanism for policy responses to the crisis. This, in IOE’s view is the appropriate approach required.
IOE has consistently stressed that: Private sector led economic growth is the best path to sustainable and inclusive recovery. Managing a rapid, sustainable, resilient and inclusive private sector led economic recovery is important for people and societies recovery from the impact of the pandemic.
In addition, IOE has advocated for well-targeted policies and programmes that have immediate and direct effects on economic resilience and preservation of employment.
Businesses will not restart operations spontaneously and economies will not be able to return to previous levels of prosperity without persistent and adequate support, both financial as well as through creating an enabling business environment. Businesses need governments to do what only governments can do – and that is to facilitate and create an enabling environment for private sector growth and resilience. In the absence of governments creating such an environment, growth cannot take place, and productive jobs cannot be created. An enabling business environment is essential for creating a stable, predictable, and incentivizing environment for investment and innovation!
IOE is supportive of policy interventions being made on a scale which corresponds to the magnitude of labour market disruptions. We need to act quickly and responsibly, minimising the social and economic consequences of the pandemic for millions of companies worldwide resulting in grave impacts on employment.
IOE concurs ontheimportance of policy measures providing the fullest possible support for vulnerable and hard-hit groups, including migrants, women, young people and informal workers. However, we are of the view that these should be accompanied by a strategy to secure a sustained transition to formality, towards more resilient labour markets and secure sustainable social protection systems.
Finally, the report elaborates on the existing stimulus gap in emerging and developing countries. On this issue, the ILO suggests that filling the gap can only be achieved through greater international solidarity. IOE from the outset of this pandemic has consistently called for international solidarity and a coordinated global response. Social dialogue at the global level plays and will continue to represent an effective mechanism to respond to the crisis. In this regard, representative business and employers’ organisations and workers’ organisations have an indispensable role to play.