An effective remedy

Wednesday, 2020-12-23 17:47:10
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A “Now Hiring” sign advertising jobs at Lowe's is seen as the spread of COVID-19 continues, in Homestead, Florida, US, April 17, 2020. (Photo: Reuters)
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NDO – The global labour market has experienced a very difficult period as the “COVID-19 storm” “swept away” many jobs, disturbing enterprises. Financial packages and measures have been introduced by many countries as remedies to "save" businesses and workers, in order to sustainably restore the job market.

Social blockade and isolation measures have seriously affected the economic and business activities of society and enterprises. According to the International Labour Organisation (ILO), the pandemic has caused 81 million workers across the Asia-Pacific region to lose their jobs, women and young people are "suffering" the most. The number of jobs in Asia-Pacific fell 4.2% compared to the pre-COVID 19 period.

Due to the lower working hours, the average income of workers fell 9.9% in the first quarter of 2020, equivalent to a 3.4% decline in regional GDP. South Asia witnessed the highest rate of job loss, with nearly 50 million people, followed by East Asia (16 million people), Southeast Asia and the Pacific Islands, 14 million and 500,000, respectively. In Europe, many countries have seen record increases in unemployment. In the UK, in the three months to October 2020, the number of unemployed workers also increased to 370,000, with the unemployment rate increasing to 4.9%.

Meanwhile, Latin America and the Caribbean have also seen a huge “setback”, the effects of which will reverberate for at least a decade, in the labour market. The region has been in its biggest unprecedented employment crisis since the publication of labour market reports in 1994. A sharp rise in unemployment in Latin America and the Caribbean, with an increase of 2.5 percentage points from five years ago, from 8.1% to 10.6%, means the number of people unable to find work has increased by 5.4 million, and the total number of unemployed is 30.1 million, the highest level in recent decades. The ILO also forecasts that the unemployment rate in Latin America and the Caribbean in 2021 will also reach 11.2%, up 0.6% compared to 2020.

Employment is one of the “hottest” issues in the pandemic period because of the long-lasting crisis. Many countries must roll out job assistance packages, and adopt strategies to create more and better jobs when manufacturing operations are reactivated and the medical emergency is under control. Achieving economic growth with the employment issue solved is seen as the key solution to poverty reduction in the face of rising inequality due to the pandemic.

The UK has decided to extend its salary support programme for workers affected by the pandemic, in the context of an uncertain future, economic stagnation and many individuals and businesses struggling in the winter. The German government has announced "unprecedented" assistance, with disbursements of up to EUR10 billion for companies and businesses adversely affected by lockdown measures. The French government has also announced a tax reduction policy for real estate owners to reduce rental rates for companies that have had to suspend operations due to the blockade.

In Asia, the Japanese government said it would consider extending the job subsidy programme, expected to end later this year for businesses affected by the epidemic, in the context of the labour market in the country continuing to be unstable, with the unemployment rate rising continuously for seven months. In the first and second supplementary budget packages for the fiscal year 2020, the Japanese Government secured US$26.8 billion to implement its job subsidy programme and has disbursed more than US$18 billion.

Although “painkillers” have been introduced by governments to "alleviate" losses caused by job losses, many workers are still struggling with accumulating difficulties and facing poverty, as about 80-90 million people could fall into extreme poverty in 2020 due to the epidemic. The low level of social security coverage and the limited capacity of institutions in many countries have made it difficult for companies and workers to bounce back.

The International Monetary Fund has proposed that governments should gradually shift from protecting old jobs to creating more new jobs, reducing measures such as salary subsidies, but instead increasing training skills so that more people can find new jobs. Policy-making should also focus on promoting job creation projects such as in green energy and infrastructure. These are considered “effective remedies” to help restore the labour market in a sustainable manner.