The economic crisis created by the COVID-19 pandemic could increase global unemployment by almost 25 million, according to a new assessment by the International Labor Organization (ILO).
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An internationally coordinated policy response, however, similar to that during the global financial crisis of 2008 and 2009, could soften the impact significantly, the UN agency said.
In its preliminary assessment note, ILO said the pandemic calls for urgent, large-scale and coordinate measures to protect workers in the workplace, stimulate the economy and employment and support jobs and incomes.
These measures include extending social protection, supporting employment retention (such as short-time work, paid leave, and other subsidies), and financial and tax relief, including relief 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.
Based on different scenarios for the impact of COVID-19 on global gross domestic product (GDP) growth, the ILO estimates indicate a rise in global unemployment of between 5.3 million (the low scenario) and 24.7 million (the 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 (for example, service providers) and goods.
A decline in employment also means large income losses for workers. The study estimates these as being between $860 billion and $3.4 trillion by the end of 2020. This will translate into drops 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 million 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.
“This is no longer only a global health crisis, it is also a major labor 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.
The ILO 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. Migrants 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 labor 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,” Ryder said.
Labor Secretary Silvestre Bello III appealed to private companies and big enterprises on Thursday to provide assistance to their workers instead of retrenching them due to work stoppage, suspension of transportation that restricted movement due to the COVID-19 outbreak.
“We are grateful to the big businesses who heeded the appeal of the President to take care of their workers and employees during this time of national emergency,” Bello said in a statement.
At the same time, Bello said the his department will provide financial assistance to workers in the private sector who are affected by the COVID-19 crisis.
Under Department Order No. 209, Series of 2020,COVID-19-affected workers in the private sector could avail financial support and employment facilitation under the so-called COVID-19 Adjustment Measures Program (CAMP).
CAMP is a safety net program offering financial support and employment facilitation to affected workers in private establishments that have adopted flexible work arrangements or temporary closure during the COVID-19 pandemic.
Under this program, DOLE would provide affected workers a one-time financial assistance equivalent to P5,000 in lump sum, non-conditional, regardless of employment status.
Bello also said the department have already provided guidelines for the implementation of flexible work arrangements including the work from home scheme, which it said is the safest manner to keep the workers employed. It is also the most compliant with the policies under an enhanced quarantine situation.
“However, the WFH is not applicable to other workers particularly those in the manufacturing industry. This is where initiatives from employers become important and necessary,” he said.
The DOLE chief also encouraged all employers to release the 13/14th month pay of employees while work is suspended so they can have the means to buy basic necessities during the COVID-19 lockdown.
“The advance payment is a practical response to help our wage earners survive the month-long quarantine. We’ll find other ways if the quarantine is extended. Let us continue to work together to beat COVID 19 because by doing so will preserve the nation’s most valuable human resource,” he added.
Senator Sherwin Gatchalian called the immediate release of CAMP assistance, saying workers who lost their jobs because of the enhanced community quarantine triggered by the COVID-19 pandemic deserve to be compensated now.
He said they could not wait long, because many of them have to feed their families and provide for their immediate basic needs on a daily basis.
Gatchalian said unfortunately, the assistance can only be released two weeks after the DOLE receives applications from the workers. What’s more, employers are also required to submit their COVID-19 precautionary measures reports.
“The problem with government is red tape and we need to release the funds now,” Gatchalian said.
He said DOLE could tap local government units to identify their constiutentswho are covered by the program.
Gatchalian also joined calls for business owners to relax their “no work, no pay” policy.
Senator Nancy Binay expressed disappointment over the slow response of the National Food Authority in address the distribution of rice to disadvantaged families and communities.
NFA has in its warehouses enough supply of rice to distribute to the most affected residents during the expanded community quarantine, Binay said.
It also has a standing memorandum of agreement with relief agencies such as the Department of Social Welfare and Development, the Office of Civil Defense and local government units for the supply of the rice requirements for relief operations during natural disasters, calamities and other emergencies.
Sen Joel Villanueva said DOLE should also implement an employment assistance program for informal workers whose source of income has been cut off due to the enhanced community quarantine prevailing in Luzon.
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Villanueva, chair of the Senate committee on labor, employment, and human resource development, said informal workers such as drivers of public utility vehicles, vendors, hawkers and the like are left without viable alternatives to earn a decent living to provide for their families.
But a congresswoman who represents teachers in the House of Representatives on Thursday urged the administration to provide at least P10,000 immediate economic relief to workers affected by the lockdown imposed to contain the spread of COVID-19.
Assistant Minority Leader France Castro also said people “are in dire need of information as to how exactly government would help them during the enhanced community quarantine.”
“President Duterte himself said in his speech that there are enough funds. There are billions of funds already available in the 2020 General Appropriation Act, like the P13 billion Contingency Fund, the P16 Billion Disaster Risk Reduction Management Fund, the already available savings, and the use of the PhilHealth reserve funds,” Castro said.
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“The national government has resources and means to provide economic relief and social welfare,” she said.
Castro added the administration should not leave it to the barangay officials to provide assistance. “The DOLE and the DSWD must have concrete plans to alleviate the plight of adversely affected workers so as not to cause fear and panic,” she said.
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