New ILO research reveals massive 10% drop in incomes globally as threats to inequality rise
The devastating losses in working hours caused by the Covid-19 pandemic have brought a ‘massive’ drop in labour income for workers around the world, says the International Labour Organization (ILO) in its latest assessment of the effects of the pandemic on the world of work.
Global labour income is estimated to have declined by 10.7%, or US$ 3.5 trillion (£2.75 trillion), in the first three quarters of 2020, compared with the same period in 2019. This figure excludes income support provided through government measures.
The biggest drop was in lower-middle income countries, where the labour income losses reached 15.1%, with the Americas the hardest hit region at 12.1%.
The outlook for the fourth quarter of 2020 has worsened significantly since the last ILO research was issued. Under the ILO’s baseline scenario, global working-hour losses are now projected to amount to 8.6% in the fourth quarter of 2020 (compared to Q4 2019), which corresponds to 245m Full Time Equivalent (FTE) jobs. This is an increase from the ILO’s previous estimate of 4.9% or 140m FTE jobs.
One reason for the estimated increases in working-hour losses is that workers in developing and emerging economies, especially those in informal employment, have been much more affected than by past crises, the ILO says.
The impact has been particularly hard in emerging economies, the ILO reports. While fiscal stimulus packages have played a significant role in supporting economic activity and reducing the fall in working hours, they have been concentrated in high-income countries, as emerging and developing economies have limited capacity to finance such measures.
Full details of the report can be found here: ILO Monitor: COVID-19 and the world of work. Sixth edition