Precarious workers pushed to the edge by COVID-19

If you are a freelancer, who pays your sick leave? If you work in a retail store on a zero-hours contract and the store closes, are you out of luck?

Most media reports on the employment effects of the COVID-19 pandemic have focused on the possibility of lay-offs and the financial consequences for employees. There has been less discussion on what happens to those workers who are not officially laid off, but whose contracts are not renewed, whose hours are whittled to zero, or whose employment agency simply tells them sorry, there is no more work available. Depending on the country, the worker may not be covered by unemployment insurance or other critical protections, such as paid sick leave.

 

During the past several decades, in countries across the world, there have been important increases in the number of workers in temporary work, part-time work, temporary agency work and other forms of subcontracted labour, as well as new forms of working, such as in the gig economy, where workers are almost always classified as self-employed.

Yet, because many countries establish eligibility thresholds for social security – minimum hours worked weekly, minimum earnings, minimum number of months on the job, minimum number of contribution periods – many workers are left without adequate protections, putting them at risk. As the number of workers in diverse arrangements increases, the coverage of unemployment insurance shrinks, even in countries with well-established systems.

In the 1990s, with diverse employment arrangements on the rise, the ILO adopted a series of international labour standards to promote the equal treatment of part-time workers, agency workers and homeworkers. Article 6 of the ILO’s Part-Time Work Convention, 1994 (No.175), for example, states that “statutory social security schemes….shall be adapted so that part-time workers enjoy conditions equivalent to those of comparable full-time workers.” It also states that those countries with thresholds in place should have them “periodically reviewed.”

More recently, the ILO Social Protection Floors Recommendation, 2012 (No. 202) said that countries should guarantee at least a basic level of social security to all, and progressively ensure adequate levels of protection to as many people as possible, as soon as possible.

In light of the COVID-19 crisis, now is a good time to heed this advice and restructure and rebuild the systems we have in place. It is clear that all workers – irrespective of their employment arrangements – need to be able to access health care, stay at home when feeling unwell so as to not report to work sick, and benefit from income support in case of a crisis-related reduction of working time or job loss.

In our diverse world, we need flexible ways of working, but this flexibility should not come at the expense of needed protections for workers. Let’s hope that COVID-19 gives the world the wake-up call that it needs.

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Almost 25 million jobs could be lost worldwide as a result of COVID-19, says ILO

18 March 2020

An initial assessment of the impact of COVID-19 on the global world of work says the effects will be far-reaching, pushing millions of people into unemployment, underemployment and working poverty, and proposes measures for a decisive, co-ordinated and immediate response. 

(ILO News) – 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 Organization (ILO).

 

However, if we see an internationally coordinated policy response, as happened in the global financial crisis of 2008/9, then the impact on global unemployment could be significantly lower.

 

The preliminary assessment note, COVID-19 and the world of work: Impacts and responses , 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 (i.e. short-time work, paid leave, other subsidies), 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. 

Different scenarios

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 (“low” scenario) and 24.7 million (“high” scenario) 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 (e.g. service providers) and goods.

 

Falls in employment also mean large income losses for workers. The study estimates these as being between USD 860 billion and USD 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.

 

Working poverty is expected to increase significantly too, as “the strain on incomes resulting from the decline in economic activity will devastate workers close to or below the poverty line”. The ILO 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).

Swift and coordinated policy responses

“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.

“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."

Guy Ryder, ILO’s Director-General

The ILO note warns that certain groups will be disproportionately affected by the jobs crisis, which could increase inequality. These include people in less protected and low-paid jobs, particularly youth and older workers. Women and migrants too. The latter are vulnerable due to the lack of social protection and rights, and women tend to be over-represented in low-paid jobs and affected sectors.

 

“In times of crisis like the current one, we have two key tools that can help mitigate the damage and restore public confidence. Firstly, social dialogue, engaging with workers and employers and their representatives, is vital for building public trust and support for the measures that we need to overcome this crisis. Secondly, international labour standards provide a tried-and-trusted foundation for policy responses that focus on a recovery that is sustainable and equitable. Everything needs to be done to minimize the damage to people at this difficult time,” concluded Ryder.

 

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