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Thu 19 Mar 2020 02:16 PM

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Covid-19 impact: up to 25m jobs, $3.4trn wages could be lost

International Labour Organisation reveals extent of the economic and labour crisis created by the Covid-19 pandemic

Covid-19 impact: up to 25m jobs, $3.4trn wages could be lost
Millions of jobs are to be lost during the Covid-19 crisis.

The economic and labour crisis created by the Covid-19 pandemic could increase global unemployment by almost 25 million, according to a new assessment by the International Labour Organisation (ILO).

The organisation said that an internationally coordinated policy response, similar to that seen during the global financial crisis of 2008/9, could lessen the impact on global unemployment.

As of Thursday, coronavirus cases totalled 220,987 globally with 8,990 deaths.

The preliminary assessment note calls for urgent, large-scale and coordinated measures across three pillars - protecting workers in the workplace, stimulating the economy and employment, and supporting jobs and incomes.

These measures include extending social protection, supporting employment retention, and financial and tax relief, including for micro, small and medium-sized enterprises.

In addition, the note proposes fiscal and monetary policy measures, and lending and financial support for specific economic sectors.

Based on different scenarios for the impact of Covid-19 on global GDP growth, the ILO estimates indicate a rise in global unemployment of between 5.3 million and 24.7 million from a base level of 188 million in 2019.

By comparison, the 2008-9 global financial crisis increased global unemployment by 22 million.

Underemployment is also expected to increase on a large scale, as the economic consequences of the virus outbreak translate into reductions in working hours and wages.

Self-employment in developing countries, which often serves to cushion the impact of changes, may not do so this time because of restrictions on the movement of people and goods.

Falls in employment also mean large income losses for workers. The study estimates these as being between $860 billion and $3.4 trillion by the end of 2020. This will translate into falls in consumption of goods and services, in turn affecting the prospects for businesses and economies, the ILO said.

The ILO also estimates that between 8.8 and 35 million additional people will be in working poverty worldwide, compared to the original estimate for 2020 which projected a decline of 14 million worldwide.

“This is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on people,” said ILO director-general Guy Ryder. “

In 2008, the world presented a united front to address the consequences of the global financial crisis, and the worst was averted. We need that kind of leadership and resolve now,” he added.

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