Over 81% of global workforce affected by full or partial workplace closures

International Labor Organization (ILO) recently reported that the COVID-19 pandemic is having a catastrophic effect on working hours and earnings globally. The current crisis is expected to wipe out 6.7% of working hours across the world in the second quarter of 2020, which is equivalent to 195 million full-time workers.

   Massive losses are expected across different income groups, particularly in upper-middle income countries with a massive 7% or 100 million full-time workers. This, according with the report, far exceeds the effects of the financial crisis of 2008.

   The sectors most at risk include accommodation and food services, manufacturing, retail, and business and administrative activities. Generally, workers and businesses are facing a massive catastrophe, in both developed and developing economies.

   More than four out of five people or 81% in the global workforce of 3.3 billion people are currently affected by full or partial workplace closures. This is a global shock, while ILO describes COVID-19 as the worst global crisis since World War II.

   A total of 1.25 billion workers are employed in the sectors identified as being at high risk of drastic and devastating increases in layoffs and reductions in wages and working hours. Many are in low-paid, low-skilled jobs, where a sudden loss of income is devastating.

   The employment impact of COVID-19 is unprecedented. It affects not only formal employment contracts, but also informal economy. The latter refers to all economic activities by workers and economic units that are in law or in practice not covered or insufficiently covered by formal arrangements. Around two billion people work informally, most of them in emerging and developing countries.

   Hence, since there has been a rapid and historically large policy response, the International Labor organization suggests considering the four above pillars as policy responses.