Poverty at workplace
- Income pressures as a result of declining economic activity will have devastating effects on workers who are near or below the poverty line. The effects of the virus on the growth used in the above unemployment estimates suggest that there could be 8.8 million more working poor in the world than originally expected (i.e. an overall decline of 5.2 million working poor in 2020 compared to an estimated 14 million before COVID-19). Under the average and pessimistic scenarios, there would be between 20.1 and 35.0 million more working poor than in the 2020 estimate before COVID-191
Who are the most vulnerable?
- Epidemics and economic crises can have a disproportionate impact on certain segments of2 the population, which can lead to increased inequality. Based on past experience, the information we currently have on the COVID-19 crisis and reflections on previous crises, we can identify several groups:
- People with underlying health problems and the elderly have the highest risk of developing serious health problems.
The lady in charge of two grandsons affected by the corona virus crisis
- Young people,who are already experiencing high rates of unemployment and underemployment, are more vulnerable to declining demand for labour, as the global financial crisis has shown. Older workers may also suffer from economic fragility. After the MERS outbreak, older workers were found to be more likely than high-age individuals to experience higher rates of unemployment and underemployment, as well as reduced hours worked. 3
- are over-represented in the most affected sectors (such as services) or in occupations that are on the front lines of managing the epidemic (e.g. nurses). The ILO estimates that 58.6 per cent of female employees worldwide work in the service sector, compared to 45.4 per cent of men. Women also have less access to social protection and will assume a disproportionate share of the health care economy if schools or childcare systems are closed (ILO, 2018).4
- Unprotected workers, including the self-employed, insecure workers and those in the low-wage economy, are at risk of being disproportionately affected by the virus because they do not have access to sick leave and paid leave, and are less protected by conventional social protection mechanisms and other forms of income stabilization.
A young lady wallet at the big market in Lomé
- Migrant workers are particularly vulnerable to the impact of the COVID-19 crisis, which is hampering both their ability to reach their workplaces in destination countries and return to their homes.
1 These estimates are uncertain as it is not clear how low- and middle-income countries will be affected. If the virus affects these economies in the same way, the impact on poverty in the workplace will be much greater.
2 See for example Lee, A. and J. Cho, 2016. The impact of epidemics on labor market: Identifying victims of the Middle East Respiratory Syndrome in the Korean labour market. International Journal for Equity in Health. 2016; 15: 196
3 Lee and Cho 2016 (ibid).
4 Key lessons from previous crises, including the GFC and SARS/MERS are outlined in Annex II.