Rising inequality, greater poverty and fewer 'decent' jobs risk long-term pandemic scars, ILO says

The Covid-19 induced crisis has disproportiantely hit vulnerable groups, women and youth workers

A supervisor at packaging company Great Southern Industries loads up a finishing machine at a facility in the US. The Covid-19 crisis has worsened pre-existing inequalities by hitting harder vulnerablShow more

An uneven global economic recovery in the second half of 2021 will create 100 million jobs this year and 80 million in 2022, but projected employment will still remain below pre-pandemic levels, the International Labour Organisation (ILO) said, revising its forecast downward.

Growth in employment will not be enough to compensate for the losses suffered until at least 2023. The crisis-induced global "jobs gap" – a combination of actual employment losses and new jobs that would have been created in the absence of the pandemic – will reach 75m in 2021 before falling to 23m in 2022, according to the ILO's latest World Employment and Social Outlook: Trends 2021 report.

The corresponding shortfall in working hours in 2021 will amount to 3.5 per cent, the equivalent to 100 million full-time jobs this year, and 26 million full-time jobs in 2022.

"Global employment recovery is projected to accelerate in the second half of 2021, provided that there is no worsening in the overall pandemic situation," the ILO said. "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."

Signs of a projected labour market recovery come after the pandemic shut down workplaces, created a shift to remote working, hit incomes, led to job losses and pushed millions into poverty.

However, the slower-than-­expected progress of vaccination campaigns and a resurgence of the virus in early 2021 prompted the ILO to revise its forecast of working‑hour losses downwards by 0.5 percentage points since its January report.

Its new projection shows that an additional 10 million full-time equivalent jobs will remain lost in 2021, giving a total of 100 million lost jobs, compared with 90 million prior to the revision.

The projected growth in employment will be too weak to provide job opportunities for people who were inactive or unemployed during the pandemic and for youth entering the labour market.

As the overall economic situation starts to improve and pandemic-related restrictions are lifted, large numbers of people who were previously inactive will enter the labour force again.

However, due to the lack of sufficient jobs, the number of unemployed people globally will "remain elevated" at 220 million in 2021 and 205 million jobless people in 2022, compared with 187m million people in 2019, the ILO said. Prior to the Covid-19 crisis, the projected unemployment rate of 5.7 per cent in 2022 was last seen in 2013.

The fall in employment and hours worked has led to a sharp drop in labour income and a corresponding rise in poverty. Compared to 2019, an additional 108 million workers worldwide are now categorised as poor or extremely poor, meaning they and their families live on the equivalent of less than $3.20 per person per day.

“Five years of progress towards the eradication of working poverty have been undone as working poverty rates have now reverted to those of 2015,” the report said, adding that this makes achieving the UN Sustainable Development Goal of eradicating poverty by 2030 "even more elusive."

Unemployment is projected to be high in countries at all income levels in 2022, with middle-income countries being the most affected. The recovery will be relatively faster in high-income countries.

In Arab states, unemployment will grow to 9.5 per cent in 2021, before declining to 8.9 per cent in 2022, compared to 8.1 per cent in 2019.

In low- and middle-income countries, the more limited access to vaccines and greater constraints on fiscal spending will dampen the employment recovery, the report showed.

"To make matters worse, many of the newly created jobs are expected to be of low productivity and poor quality," the ILO said.

The Covid-19 crisis has also made pre-existing inequalities worse, with vulnerable groups (such as informal or migrant workers), women and youth disproportionately hit hardest, the report showed.

"The crisis threatens to jeopardise progress on gender equality, as women have suffered disproportionate job losses while seeing their unpaid working time increase," the ILO said.

The pandemic-induced unemployment crisis is far from over – leaving a legacy of rising inequality, greater poverty and fewer 'decent' jobs – while risking long-term "scarring" effects on workers for years to come without "human-centred" recovery policies, the ILO warned.

The ILO recommended that such a recovery should seek to promote broad-based economic growth through investment in sectors that can be a source of decent jobs and that support a just transition.

It called for the reskilling of workers and providing high quality care services that will help support household incomes and labour market transitions.

It also said inclusive, sustainable and resilient economic growth and development requires the strengthening of institutional foundations.

The ILO said using social dialogue between governments, employers and workers' organisations can help develop human-centred recovery strategies.