The Covid-19 pandemic wreaked havoc on employment last year with an estimated 8.8% of global working hours lost, which is equivalent to 225 million full time jobs.
AN INCREASING DEMAND FOR DIGITAL SERVICES DURING THE
COVID-19 PANDEMIC SAW THE ICT BOUNCE BACK GLOBALLY, BUT SOUTH AFRICA CONTINUES TO LAG BEHIND
But while the impact has differed across countries and industries, the Information and Communications Technology (ICT), financial and insurance sectors have demonstrated some of the most resilience during pandemic, according to the International Labour Organisation (ILO).
“Reflecting the increasing demand for digital services, along with the strong
performance of financial markets during this period, employment in the second quarter grew by 5% in the information and communication sector and by 3.4% in financial and insurance activities.
“Employment also increased, most notably in the third quarter, in mining and quarrying and in utilities,” reads the seventh edition of the ILO Monitor: Covid-19 and the World of Work.
But in South Africa the pandemic exposed the enormous deficiencies in the digital economy, including the impact on pupils and students who cannot learn from home due to the digital divide, and SMMEs that had to shut their doors for various reasons such as poor access to broadband.
While there is a final draft on the ICT and Digital Economy Masterplan for South Africa for the next five years, research firm ICT Africa warned last year that policymakers and regulators must act with speed otherwise the virus is likely to increase digital inequality.
As noted in South Africa’s quarterly employment stats, the ILO paints a similar picture globally on actual job losses and those who have given up looking for work. A total of 81 million of the job losses were due to inactivity as people have been unable to look for work due lockdown restrictions, and others have stopped looking.
But the job losses alone, which the organisation says are around four times greater than the number lost during the 2009 global financial crisis, do not reveal how the extent of the damage on the labour market.
“These massive losses resulted in an 8.3% decline in global labour income (before support measures are included), equivalent to US$3.7 trillion or 4.4% of global Gross Domestic Product (GDP),” says the seventh edition of the ILO Monitor: Covid-19 and the World of Work.
Also as seen in South Africa, the report says women have been more affected than men by disruptions to the labour market.
Globally, employment losses for women are 5% compared to men at 3.9%.
“In absolute numbers, the loss is larger for men (80 million) than for women (64 million) because of the long-standing gender gap in labour force participation rates. Across all regions, women have been more likely than men to become economically inactive, that is to drop out of the labour force, during this crisis,” the document reads.
Younger workers have also suffered a massive blow either through jobs losses, dropping out of the labour force or delaying entry into it. The employment loss amongst those aged between 15 and 24 years is 8.7% compared to 3.7% for adults.
“… outside high-income countries, jobless young people, or those who were about to enter the labour market, did not generally move into unemployment but, rather, dropped out of the labour force, or delayed their entry into it.
“This explains why the global number of unemployed young people did not increase. Nevertheless, this crisis has exacerbated young people’s disconnection from the labour market, highlighting the all too real risk of a lost generation,” the report warns.
The ILO says that while a robust recovery is expected for the second half of this year, the evolution of the pandemic and how governments respond will play a major role.
“The actual speed and quality of the recovery will depend on a wide range of political, economic and health factors, including the extent of vaccination, how countries continue to control the pandemic, and whether policy measures can be maintained to promote economic and labour market recovery.”
Also, recovery for sectors are likely to vary this year.
Massive job losses have been experienced across the world in accommodation and food services, retail and manufacturing. South Africa’s tourism sector was the last to open under lockdown level one, and it suffered another blow with the country moving back to level three, which included a ban on the sale of alcohol for more than a month.
The ILO says that recovery will also depend on income support for workers.
It warns that inequality is likely to further increase as a result of the types of jobs lost. It cites data from the United States and the United Kingdom, which shows significant job losses at the lower end of the labour income distribution, while high-paid jobs have been left largely intact. And at the same time, job recovery has been stronger for high-earners, while demand for low-paid jobs continues to be weak.
These concerns are shared by the South Africa’s labour federations and NGOs, which have made several demands including the introduction of a Basic Income Grant, and that companies which receive financial assistance, be barred from retrenching staff.
“Policy interventions must focus on robust and broad-based recovery by addressing employment, income, workers’ rights and social dialogue: a human-centred recovery,” the document reads.
It says though, restoring solid and sustained growth alone is insufficient if countries are to successfully deal with the crisis, due to the varied impact on different jobs, socioeconomic groups, sectors and regions.
THE FOCUS FOR 2021
The ILO makes the case for five interrelated issues that must be at the forefront of policymakers’ priorities this year.
Macroeconomic policy needs to be and remain accommodative in 2021 and beyond to combat the large work deficit and income losses. Fiscal stimulus packages, particularly income support measures, continue to be necessary to protect households and businesses and to boost aggregate demand.
Investment, spurred by public investment, is crucial to rebuilding economies and creating jobs.
Secondly, international action to support low and middle-income countries continues to be critical. It says many developing countries cannot afford vaccines, and they are also constrained in implementing the economic and employment policies needed to support the recovery.
It warns that if there is no international support, the impact on youth will be a disaster, and the gap between developed and developing countries will grow.
Policy measures must tackle the youth, women and low-paid and low-skilled workers who have less potential to recover quickly.
Governments need carefully balanced sectoral policies to help the hardest hit by the pandemic to recover, while at the same time realising the full potential for creating jobs in fast-growing sectors.
Lastly, the ILO says policymakers need to seize the opportunity to develop and implement recovery strategies that will reshape trajectories to meet longer term goals and promote the transition to a more inclusive, fair and sustainable economy.
It says this cannot happen without social dialogue, which must include employers’ and workers’ organisations.
By: Amy Musgrave