Recovery in global labour market to be slow and uneven in 2021, ILO says

A global recovery in working hours and incomes this year will be slow, uneven and uncertain, according to the International Labour Organisation.

As a result, policymakers will be required to adopt “human-centred” measures for a sustainable and inclusive rebound, the organisation said yesterday in its seventh report on the impact of the pandemic on labour markets.

The ILO: Covid-19 and the world of work report said the Covid-19 pandemic is set to cut working hours by 3 per cent, the equivalent of 90 million full-time jobs, compared with pre-crisis levels.

Vaccination delays around the world could cut working hours by 4.6 per cent, or the equivalent of 130 million full-time jobs, compared with the fourth quarter of 2019.

An optimistic scenario forecasts a 1.3 per cent decline if the pandemic is controlled and consumer and business confidence continue to improve.

“The signs of recovery we see are encouraging but they are fragile and highly uncertain, and we must remember that no country or group can recover alone,” said Guy Ryder, ILO director-general.

The tentative signs of a labour market recovery come after the pandemic shut workplaces, forcing many to work from home. The slowdown hit incomes, led to job losses and pushed millions into poverty.

The ILO said the world faces heightened levels of job and income uncertainty and risks that could dampen or derail a recovery this year.

The Americas, Europe and Central Asia are expected to suffer about twice the working hour losses of other regions due to the stringent health measures that were in place at the start of the year.

In contrast, the Asia and Pacific region is expected to record the smallest number of working-hour losses this year, reflecting a recovery that was under way at the end of 2020.

Global employment and working hours are expected to recover this year, compared with last year. Employment losses are projected to decline to 68 million this year, from 144 million jobs in 2020, under the baseline scenario, according to the ILO.

The organisation voiced concerns about a K-shaped recovery, where some parts of the economy or labour market benefit strongly from the recovery while others are left behind.

This means sectors and workers hit hardest could be left behind in the recovery, leading to increasing inequality, unless corrective measures are taken, it said.

The hardest-hit sectors are accommodation and food services, where employment fell by more than 20 per cent, followed by retail and manufacturing.

In contrast, employment in information, communication, finance and insurance increased in the second and third quarters of last year.

Among socio-economic groups, the pandemic affected women and young people the most in terms of employment and working-hour losses.

“Covid-19 has resulted in the most severe crisis for the world of work since the Great Depression of the 1930s,” the organisation said.

The ILO said 8.8 per cent of global working hours were lost in 2020, relative to the fourth quarter of 2019, which is the equivalent of 255 million full-time jobs. This is about four times greater than the number of jobs lost during the 2008 global financial crisis.

In Arab countries, the total estimated decline in working hours last year stood at 9 per cent.

Overall, these worldwide losses resulted in an 8.3 per cent decline in labour income, before support measures are included, equal to $3.7 trillion or 4.4 per cent of global gross domestic product.

“There are signs of a recovery on the horizon, with evidence of a significant rebound in economic activity and labour markets in the second half of 2020,” the organisation said.

To tackle the recovery, policies need to include public health, economic and labour market measures.

The organisation urged policymakers to focus on a robust recovery that addresses employment, incomes, workers’ rights and social dialogue.

It called on them to maintain accommodative macroeconomic policies to support incomes and investment as the number of Covid-19 infections rises.

They were also urged to assist low- and middle-income countries with vaccinations and policy measures, as well as ensure that hard‑hit groups find decent work opportunities and do not suffer any long-term “scarring effects”.

The ILO said the needs of diverging sectors should be balanced with effective policy measures to support labour market transitions and small enterprises.

“We are at a fork in the road. One path leads to an uneven, unsustainable, recovery with growing inequality and instability, and the prospect of more crises,” said Mr Ryder.

“The other focuses on a human-centred recovery for building back better, prioritising employment, income and social protection, workers’ rights and social dialogue. If we want a lasting, sustainable and inclusive recovery, this is the path policymakers must commit to.”

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