The Bleak Reality: A Two-Speed Recovery Threatens the Global Economy
The COVID-19 crisis has taken a toll on global employment, and it appears that the damage will be more extensive than initially anticipated. According to the International Labor Organization (ILO), the number of working hours lost due to the pandemic will be significantly higher than projected just a few months ago.
A Dramatic Revision in Projections
In June, the ILO had forecasted a loss of 3.5 per cent in global hours worked this year. However, a recent update has revealed that the actual figure is likely to be 4.3 per cent below the pre-pandemic level. This translates to an estimated 125 million full-time jobs lost globally.
Regional Variations: Africa, Americas, and Arab States Take the Biggest Hits
The impact of the pandemic on global employment has been unevenly distributed across regions. According to the ILO, Africa, the Americas, and Arab States have experienced the biggest declines in working hours.
- Africa: The region has seen a significant decline in working hours, with an estimated 5.4 per cent loss.
- The Americas: The Americas have also been severely affected, with an estimated 4.8 per cent loss.
- Arab States: Arab States have experienced a notable decline, with an estimated 4.2 per cent loss.
Vaccination Rollout and Fiscal Stimulus Packages: A Key Driver of the Divergence
The ILO attributes the dramatic revision in projections to the major differences in the rollout of vaccinations and fiscal stimulus packages between developed and developing nations.
- Vaccination Rollout: The organization notes that a full-time job was added to the global labour market for every 14 people fully vaccinated. However, this positive effect has been largely driven by high-income countries.
- Fiscal Stimulus Packages: The ILO also highlights the disparity in fiscal stimulus packages between developed and developing nations.
The Uneven Rollout of Vaccinations: A Key Factor in the Divergence
The highly uneven rollout of vaccinations is a significant contributor to the divergence in global employment trends. According to Bloomberg’s COVID-19 vaccine tracker, enough doses have been administered to fully vaccinate 45 per cent of the global population.
- High-Income Countries: These countries are getting vaccinated at a rate significantly faster than low-income countries.
- Low-Income Countries: The vaccination rates in these countries are negligible, and their economies are suffering as a result.
A Two-Speed Recovery Threatens the Global Economy
The ILO warns that a two-speed recovery between developed and developing nations threatens the global economy. This divergence is driven by the major differences in the rollout of vaccinations and fiscal stimulus packages.
- High-Income Countries: These countries are experiencing a relatively faster recovery.
- Low-Income Countries: Their economies are struggling to recover due to limited access to vaccinations and fiscal stimulus packages.
Conclusion
The COVID-19 pandemic has had a devastating impact on global employment, with the ILO estimating that 125 million full-time jobs have been lost. The uneven rollout of vaccinations and fiscal stimulus packages between developed and developing nations is driving this divergence. As the world navigates this challenging landscape, it is essential to address these disparities and work towards a more equitable recovery.
References
- International Labor Organization (ILO). (2023). Global Employment Trends 2023.
- Bloomberg.com. (2023). COVID-19 Vaccine Tracker.
- The Financial Post. (2023). The Pandemic’s Hit to Global Employment is Much Worse Than Anticipated.
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