How will COVID-19 affect the world of work?

The corona virus pandemic, COVID-19, which appeared in China at the end of 2019, is having very serious consequences on the planetary economy. All sectors of economic activity are deeply affected; Moreover, the world of work has a profound impact on the performance of labor markets is and will be seriously affected. Health, affected, workers in all sectors are affected and will be affected as the health crisis lasts. The urgent question of the health of the population so fragile due to the consequences of the crisis by the phobia and chronic unbridled fear, the population of the planet earth is facing serious harm. Workers in all sectors, their families, the virus and the resulting economic consequences have and will have unprecedented consequences in three areas in the world of work.

Growth of underemployment and unemployment in the world

The world, long before the crisis, vegetated in the problems of underemployment and increased unemployment due to capitalist systems. Solving these employability woes is urgently needed in every country. African countries are hard hit. The corona virus pandemic, COVID-19, is adding to the phenomena of underemployment and unemployment around the world. Early ILO estimates confirm a significant rise in unemployment and underemployment in the wake of the virus. Based on different scenarios relating to the impact of COVID-19 on global GDP growth, preliminary ILO estimates show an increase in global unemployment ranging from 5.3 million (“optimistic” scenario) to 24 million, 7 million (“pessimistic” scenario) from a reference level of 188 million in 2019. The “medium” scenario suggests an increase of 13 million (7.4 million in high-income countries).
While these estimates remain highly uncertain, all figures point to a substantial rise in global unemployment. By comparison, the global financial crisis of 2008-09 increased unemployment by 22 million.

The consequences of the health crisis on underemployment and unemployment

Like all sectors affected by the health crisis, underemployment and unemployment are also expected to increase on a large scale. This was the case during previous crises, the shock undergone by the demand for labor will probably result in huge downward adjustments in wages and working hours in all private, parastatal or even public companies, whatever their sizes.

Underemployment, very frequent long before the crisis, will be accentuated; when it comes to unemployment, the world will face serious realities of increased employability gaps. The informal sector will be forced to close the doors not by will, but by constraint Each layer of society will be confronted with harsh realities of precariousness. A reality of precariousness according to layers and according to lifestyles. For follow-up reasons, men and women will consider having other sources of income. We are going to see the birth of micro-projects and micro-enterprises everywhere. The world economy will have a new turn based on remote working. The birth of another form of informal economy will change the normal course of things. For this reason, informal employment will again face an increase during the crisis. However, current restrictions on the movement of people and goods will hinder the coping mechanism.

The fall in economic activity and the constraints, in particular the restriction on the movement of people and goods according to the curfews in place, will weigh on the movement of people to reduce the returns of the manufacturing industry and services

The most recent data shows that the total value added of industrial enterprises fell 13.5 percent in China for the first two months of 2020 (Source: National Bureau of Statistics of China). The closing of the air and land borders is another very serious consequence of this, apart from the restrictions introduced. Many employers are obliged to put their employees on technical or permanent layoff, as is the case with the hostesses of the travel agency SIGHT AFRICA TRAVEL & SERVICE.

Three employees of the travel agency SIGHT AFRICA Travel and Service put on technical layoff following the closure of air borders.

Regional and global supply disruptions

The introduction of restrictions due to the crisis will limit movement from one place to another. Employment sectors requiring travel or even nomadism: services, tourism, travel and retail will be particularly weakened. An initial assessment by the World Travel and Tourism Council (WTTC) predicts a drop in international arrivals of up to 25 percent in 2020 that would put millions of jobs at risk. This is precisely the case with Ms. Esther, who had to close the doors of her travel agency SIGHT AFRICA TRAVEL & SERVICE in the grounds of the Hotel La Concorde located at the end of Adidoadin pavement, the rental fee of which amounts to Five hundred thousand CFA francs (500,000 CFA francs) or Seven Hundred and Sixty-two Euro (762 € ) per month without counting the salaries of the three employees.

Travel agency office closed following the closure of air borders.

Implications for earned income and in-work poverty

The decline in economic activity and the reduction in job offers will decline due to quarantine measures and a new way of life. To date, a preliminary estimate (as of March 10) suggests that infected workers have already lost nearly 30,000 months of work, with the ensuing loss of income (for unprotected workers). The impact on employment results in large losses of income for workers. Overall labor income losses are expected to be between $ 860 billion and $ 3,440 billion. The loss of labor income will result in lower consumption of goods and services, which is detrimental to the sustainability of businesses and the resilience of economies.

Table: Estimated decline in labor income and increase in extreme and moderate occupational poverty ( <to $ 3.20 per day, PPP), 2020

Income group Optimistic Way Pessimistic
Labor income (in billions of dollars) -860 -1,720 -3,440
Extreme and moderate poverty at work (in millions)
World 8.8 20.1 35.0
Low income 1.2 2.9 5.0
Lower middle income 3.7 8.5 14.8
Column 1 Value 6 3.6 8.3 14.5

Note:Working poverty estimates refer to a severe poverty line (less than $ 3.20 in PPP) for 138 low- and middle-income countries. This analysis excludes the potential effects on working poverty in high income countries..