ILO report on the pandemic

Saving the ‘lockdown generation’

Print edition : July 03, 2020

Migrant workers near Ernakulam Town railway station on June 14. The average age of the migrant worker in India rendered jobless by the lockdown is between 25 and 40. Photo: Thulasi Kakkat

At the food court in the recently reopened Marina Bay Sands shopping mall in Singapore on June 19. According to the ILO Monitor, young people employed in low-end supply chain jobs in food and retail businesses bore the brunt of job losses owing to the pandemic. Photo: ROSLAN RAHMAN/AFP

Early monitoring reports by the International Labour Organisation suggest that globally the young working population has borne the brunt of the COVID-19 pandemic.

One of the biggest blows dealt by the COVID-19 pandemic, and the consequent lockdown, has been to the livelihoods of the young working population, especially those in the lower income groups. Even as countries and international agencies struggle to get an estimate of the extent of working hours reduced, the quantum of salaries trimmed and the number of jobs lost, early reports by the International Labour Organisation (ILO) suggest that globally, the young population (representing the “lockdown generation”) has been hit the hardest. The ILO, which has been monitoring the labour market situation since the onset of the COVID-19 pandemic, has called for large-scale and urgent policy responses, including macroeconomic interventions, to mitigate long-term damage to young people.

The recession precipitated by COVID-19 has been much worse than the previous recessions, says the report, predicting long-term wage losses especially for those who will be graduating from school or university this year. According to the fourth edition of the ILO Monitor “COVID-19 and the World of Work,” this section is likely to face intense competition for fewer jobs.

Nearly 94 per cent of the world’s workers live in countries that have a record of workplace closures. There has been a 10.7 per cent decline in the hours of work, equivalent to 305 million full-time jobs. However, the report states that intensive testing of people for COVID-19 infection and tracing the contacts of the infected, as recommended by the World Health Organisation, will reduce labour market disruptions. According to the report, this strategy has not only helped countries utilise information better and rely less on restrictive measures but also increased the level of public confidence which is necessary for economic activity.

The report underscores the fact that the younger generation has been disproportionately affected by workplace closures. Regionally, the Americas, Europe and Central Asia present the largest losses in terms of the number of hours worked. Globally, young people have endured multiple shocks such as disruption of education, employment, training, incomes and job prospects. According to the report, 178 million young workers globally, or four in 10 young workers, were employed in sectors that have now been hard hit. About 77 per cent of young workers were in informal jobs, as compared with 60 per cent of adult workers. Technical, educational and vocational and on-the-job training has been severely disrupted by the pandemic. According to a joint survey by the ILO, UNESCO and the World Bank, 98 per cent of the respondents reported complete or partial closure of training and vocational schools. Over two-thirds of such training is provided through online mechanisms. The lack of digital skills among teachers and students has severely impacted educational as well as vocational skill training in low-income countries. Owing to a weak infrastructure and limited access to the Internet and Information Technology (IT), only a minuscule proportion of low-income countries had shifted to online teaching, preferring instead to listen to television or radio broadcasts or use traditional teaching methods. School closures were reported to be the maximum in Africa.

A joint survey by the ILO and partners of the Global Initiative on Decent Jobs for Youth has reported that since the onset of COVID-19, one in six young people had stopped working, and not of their own volition. Among the employed youth, a 23 per cent reduction in the hours of work was reported. As many as 10 per cent of young students reported that they were unlikely to complete their studies, while half of those surveyed reported that their studies had been delayed.

Anxiety and depression

More than half of young people surveyed had become vulnerable to anxiety or depression since the onset of the COVID-19 pandemic. One in six young people surveyed had stopped working, and 60 per cent of women and 53 young men in this survey viewed their career prospects with uncertainty and fear. Young people who had discontinued working ran the highest risk of anxiety and depression.

According to the ILO Monitor, much of the loss in working hours is owing to the introduction of public health measures such as “strict confinement” and lockdowns, whereas the testing and tracing strategy was seen to reduce labour market disruption. Assessing the relationship between the testing and tracing strategy and the loss of working hours, the report infers that testing and tracing was associated with a reduction in loss of working hours by as much as 50 per cent. Effective testing and tracing provide valuable information and enable the authorities to take proper policy decisions on public health measures and economic interventions.

The report cites the example of the Republic of South Korea, where an effective testing and tracing strategy led to lower probability, duration and severity of confinement and lockdown which, in effect, reduced the economic toll of these measures. By generating more precise knowledge about the pandemic, these measures also managed to mitigate the impact of the pandemic on consumption and production. As a result of reduced risks and growing public confidence, economic activity was resumed. An efficient testing, tracing and isolating mechanism will help companies better organise workplace activities such as work shifts and sick leave replacements and initiate precautionary measures while maintaining operational continuity.

In many countries, including India, the levels of testing and tracing have been abysmally low. As a result, governments have had to rely on containment and lockdown measures and work-from-home directives as a strategy to contain the coronavirus spread. The ILO Monitor records that there is increasing evidence that the costs of testing and tracing are, in fact, only a small fraction of the economic costs that containment entail. In two countries that undertook extensive testing and tracing, the costs amounted to less than one per cent of their GDP. The report suggests that widespread contact tracing programmes could also provide temporary employment opportunities in a depressed labour market scenario.

While recommending that high-income countries help low-income countries with testing and tracing, the report also notes that the implementation of this strategy must take into account the data privacy of workers, which must be protected at all times. Public support is crucial for the effectiveness of this strategy, and information on the COVID-19 infection should be collected only to the extent of its relevance to the occupational safety and health of workers. Also, this data must be “processed lawfully and fairly” so that it is not used to discriminate against workers or jeopardise their employment prospects.

The COVID-19 pandemic struck at a time when employment opportunities for the youth (15-24 years) were already stagnant. The global youth unemployment rate before the global economic crisis of 2007 was at 12.3 per cent, which was less than the unemployment rate of 13.6 per cent in 2019. In 2019, 75 per cent or more of young workers were engaged in informal jobs in South Asia and Africa, rendering them vulnerable to economic crises and shocks. The COVID-19 pandemic has only worsened this situation in terms of overall job losses, collapse of businesses and failure of startups, not to mention labour rights. Before the onset of the COVID-19 pandemic, labour under-utilisation rates were already high among women, a trend which the ILO Monitor says is likely to worsen. Women employed in the garment industries in low- and middle- income countries have been the most affected .

Examining data from 64 countries, the report found that prior to the crisis, the hourly earnings for prime-age workers was, on an average, 71 per cent more than what their younger counterparts earned. Compared to prime-age workers, younger people were mostly employed in low-paid sectors that had been hit hard by COVID-19. These sectors included food, accommodation and retail and wholesale businesses. As supply chains of manufacturing had been disrupted by the pandemic, young people who were employed in low-end supply chain jobs bore the brunt of the job losses, with their meagre savings rendering them even more vulnerable to economic shocks.

The impact of the COVID-19 pandemic has been reported as high in wholesale and retail trade; repair of motorcycles and vehicles; manufacturing; real estate, business and administrative activities and accommodation and food services; medium-high in transport, storage and communication, art, entertainment and recreation sectors; medium in mining and quarrying, financial, insurance services and construction; and low to medium in agriculture, forestry and fishing. The impact on economic output has been low in economic sectors like education, compulsory social security, health, utilities, public administration and defence. For young women, the double burden of paid and unpaid work has intensified with the shutting down of schools and childcare centres.

Nearly 70 per cent of international migrants are aged under 30 and have been unable to get re-employed or reach their home destinations. In India, too, the average age of the migrant worker rendered jobless by the blanket lockdown is between 25 and 40. Till date, there has been no official estimate of the job losses by the Indian government. India is the only country where migrant workers were compelled to leave for their homes in the villages, undertaking arduous journeys across the country on foot after the blanket lockdown was announced.

Suggested interventions

Policy interventions including macroeconomic strategies are desperately needed, says the report. Some of these interventions include employment-intensive programmes targeting the young; social protection and support for educational skills and development, and improving the rights of workers and their workplace conditions.

One positive intervention suggested by the report is the mitigation of long-term job losses for young people by adopting the European Union’s counter-cyclical policy of a Youth Guarantee Scheme targeted at employment recovery. As most countries struggle with economic recovery, the negative effects of job losses on the unemployed will be mitigated to an extent in countries that have a strong tradition of welfarism and social protection. The effects are likely to be more adverse in countries where infrastructure is highly privatised and formal employment is negligible.

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