Author: Kunal Sen
Seven months into the unprecedented crisis of COVID-19, we already see significant effects on employment and earnings worldwide. The fallout of #COVID19 could see poverty rise for the first time in over two decades — up to half a billion people could fall into global poverty in developing countries Click To Tweet – with impacts that outlast the policy response and hasten structural change.
The 2020 Jobs and Development Conference, held online on 1-4 September, focused on better jobs for development. In the policy panel with Indhira Vanessa Santos from the World Bank, Sangheon Lee from ILO, Martha Chen from Harvard Kennedy School, and Haroon Bhorat from the University of Cape Town, we took stock of what we know about the employment effects of the pandemic in the Global South, the policy responses and their impacts, successes, and what more can be done to protect workers.
COVID-19 exposes an acute need to build a just labor market
The key takeaway for me from the discussion is this: The global #COVID19 crisis is a turning point for the world economy, an opportunity for fundamental reforms to reduce global poverty and redress inequalities. Click To Tweet
Governments and international organizations have responded swiftly and strongly to COVID-19, including in several countries in the developing world. But willingness to act has not necessarily meant effectiveness. The crisis has exposed the extreme vulnerability of informal workers, who account for most workers in developing countries and who are disproportionately impacted by the decline in work associated with the policy response.
To date, the World Bank counts more than one thousand social protection and labor measures adopted in response to COVID-19 worldwide. These policy actions span social assistance, social insurance, and supply-side labor measures. Across the OECD, jobs retention schemes have supported over 50 million jobs, ten times as many as during the global financial crisis. Yet, most support packages and schemes have not reached informal workers effectively or at scale – catering mainly to the formalized economy and existing beneficiaries, these give little or are inaccessible to small and informal businesses, low-income households, and home workers, especially in the developing countries.
Against this backdrop, meaningful and sustainable change requires shifting how we think about informal work and giving informal workers the recognition and rights they deserve. The call for a global commitment to informal workers in Martha Chen’s opening words should be heeded. Responsibility does not lie solely with governments and states, companies and actors in supply chains also need to be held accountable for the welfare and decent livelihoods of workers.
Part of this change will be changing the nature of labor market support to extend legal and social protection to all workers. This will require shifting towards financing systems that depend less on labor taxation, which largely limits assistance to formal sector workers.
It is also clear that to move from acute crisis response to recovery, we need clear exit strategies from pure COVID-19 containment to avoid doing further harm to the economy. For one, pivoting from emergency cash grants to recovery cash grants will be required to restart the livelihoods of informal workers impacted by lockdowns and other measures. Broken supply chains will also need to be repaired or restored. And as the COVID-19 pandemic continues to unfold, we must look at how to secure and mobilize unified global support to those countries where the fiscal space for responding to new waves of needs is now limited or non-existent.
Better data is at the heart of policy success
The other takeaway I want to highlight is the need for more and better quality and relevant employment data. Finding the right policy fixes hinges on knowing the problem, but regular labour force survey data remains frustratingly limited in many parts of the developing world, especially in Africa.
A core challenge for country-level researchers, policymakers, and donors will be to fill this data gap. Asking the right questions will also be key to unlocking policy solutions. As laid out by Haroon Bhorat, understanding the transmission mechanisms of the COVID-19 crisis in labour markets, identifying who is being affected and who is not, and categorizing the employment effects that we have seen is essential in ensuring that policy responses do the most to help.
The data revolution for sustainable development is already at the heart of UNU-WIDER’s research and data analysis, with partnerships, capacity building, and open data access laying the groundwork for tangible change. Likewise, the Jobs and Development Conference continues to be a unique platform for sharing and learning from each other. With our work, we need to continue to support policymaking that is inclusive and fair, so that the human capitals costs inflicted by the pandemic especially on youth, women, and the low-skilled do not mean that the gains of the last decades are lost. We must make this crisis a time when no one is left behind.
This is the sixteenth blog on ways to protect workers and jobs in the COVID-19 (Coronavirus) crisis, based on a policy panel on the employment effects of COVID-19 at the 2020 Jobs and Development Conference ‘Better Jobs for Development’, and was first published on WIDERAngle. The 2020 Jobs and Development Conference ‘Better Jobs for Development’ was organized by the World Bank, IZA – Institute of Labor Economics, the Network for Jobs and Development, and UNU-WIDER. The event was held in a virtual format from September 1-4 2020.