2020 working hour losses were four times greater than during the ’09 financial crisis
According to a UN report released on Monday, due to the restrictions put in place in order to curb the spread of Covid-19, 8.8% of all work hours around the world were lost. The International Labor Organization estimated that the percentage is equivalent to 255 million full-time jobs. “This has been the most severe crisis for the world of work since The Great Depression of the 1930s. Its impact is far greater than that of the global financial crisis of 2009,” ILO Director-General Guy Ryder, said.
The layoffs have hit those working in industries such as entertainment, retail trade and transportation particularly hard. In his opinion piece, Daniel S. Hamermesh writes that “The hardship is on workers in those industries, particularly less-skilled workers whose incomes are low even in good times.” The ILO’s report also noted that the majority of people who lost work stopped looking for new employment—likely due to the restrictions imposed on businesses that depend on face-to-face interactions such as restaurants, stores, and hotels.
The ILO’s report highlights that there was “significant variation across regions” but “employment losses were highest in the Americas” and Daniel S. Hamermesh’s research notes that the trend was identified early. “With the onset of the crisis and lock-downs, by the week of March 8–14 the percentage employed or unemployed [in the US] had already fallen to 62.7% [from 63.4% in February]; the employed had fallen to 60.0% [from 61.1% in February], and the unemployment rate had risen from 3.5% to 4.4%,” Hamermesh writes in his opinion piece.
There was also variation in the way different demographic groups were affected, with women and younger workers facing the brunt of job losses and reductions in hours. Young workers in particular faced an employment loss of 8.7%, compared to 3.7% for adults. IZA World of Labor author Bart Cockx is also concerned about youths graduating and entering the labor market: Cockx predicts that they will experience considerable negative impacts on their careers. “[W]e should harness the current generation of youths through targeted wage subsidies and study grants,” he recommends in his opinion piece.
The ILO’s report predicts that the economy will start recovering at a stable pace in the second half of 2021 but it will also partially depend on the speed of the Covid-19 vaccination deployment. “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. 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,” Ryder said.
Read Daniel S. Hamermesh’s opinion piece Fighting a coronavirus recession, Daniel S. Hamermesh’s opinion piece Measuring employment and unemployment—Primer and predictions and Bart Cockx’s opinion piece The coronavirus crisis and the next generation.
Find more IZA World of Labor coronavirus content on our curated topics pages: National responses to Covid-19 and Covid-19—Pandemics and the labor market.