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Throughout 2021, the pandemic weakened the economic, financial and social fabric in almost every country, regardless of development status. Developed economies recoup significant elements of their employment and income losses. Emerging and developing countries continued to struggle with workplace closures and weak economic activity due to the fallout of the labour market. At the same time, significant differences emerged, primarily driven by differences in vaccination coverage and economic recovery measures.
The above statement is an overall conclusion in the “World Employment and Social Outlook: Trends 2022.” from the International Labour Organization (ILO, 2022). The report provides a comprehensive assessment of how the labour market recovery has unfolded worldwide, reflecting different national approaches to tackling the COVID-19 crisis. It analyses global patterns, regional differences and outcomes across economic sectors and groups of workers.
A world of work already in transition, as a result of demographic shifts, technological disruptions and climate change, descended further into disarray as the pandemic continued.
The pace at which economic activity has recovered has depended mainly on the extent to which the virus has been contained. The recovery follows different patterns across geographies and sectors. However, every new outbreak brings setbacks. Many gains in decent work made before the pandemic have been significantly impacted, and pre-existing decent work deficits are dampening the prospects of a sustainable recovery in many regions. The report emphasises the following:
- Recovery patterns vary significantly across regions, countries and sectors.
- Overall, key labour market indicators in all regions – Africa, the Americas, the Arab States, Asia and the Pacific, and Europe and Central Asia – have yet to return to pre-pandemic levels.
- Underlying structural deficiencies and inequalities are amplifying and prolonging the adverse impact of the crisis.
- Developing economies that rely on exports of labour-intensive goods or commodities have struggled to adjust to volatile demand resulting from pandemic-related shifts in economic growth.
- Employment losses and reductions in working hours have led to reduced incomes.
- The asymmetric recovery of the global economy has started to cause long-term knock-on effects, in terms of persistent uncertainty and instability, that could derail the recovery.
- The rise in prices of commodities and essential goods, while labour markets remain far from recovered, significantly reduces disposable income and thereby adds to the cost of the crisis.
- The recovery of labour demand to pre-crisis levels can be expected to take time, which will slow growth in employment and working hours.
- In 2022, the projections suggest that there will be a working-hour deficit equivalent to 52 million full-time jobs owing to crisis-induced labour market disruptions.
- Many of those who left the labour force has not come back. Hence, the level of unemployment still underestimates the full employment impact of the crisis.
- Labour market recovery is fastest in high-income countries.
- The recovery is unequal within countries.
- The pandemic has started to induce economic changes that could become structural, with enduring implications for labour markets.
- Before the pandemic onset, temporary employment as a share of total work had increased over time, though not uniformly across sectors and countries.
- Temporary employment rates are higher in low- and middle-income countries (just over one-third of total employment) than in high-income countries (15 per cent).
- Temporary workers suffered job losses at a higher rate than non-temporary workers at the beginning of the pandemic. However, most economies have since seen a rise in newly created temporary jobs.
- In the early stages of the pandemic, informal employment did not play its traditional countercyclical role of absorbing displaced workers from the formal sector in countries characterised by dual labour markets.
- Macroeconomic policies will need to go beyond a countercyclical role throughout the recovery period, merely seeking a return to pre-crisis outcomes since this would not address decent work deficits or leave countries any less vulnerable to future crises.
- Extending and ensuring the protection of all workers entails guaranteeing fundamental rights at work, ensuring health and safety at the workplace and implementing a transformative agenda for gender equality.
- Closing social protection gaps and providing universal access to comprehensive, adequate and sustainable social protection must remain a key priority.
- Social dialogue has played a vital role in response to the pandemic. Many policies and measures to limit job losses have resulted from tripartite discussions.
- Achieving a human-centred recovery will require the successful implementation of four pillars:
- inclusive economic growth and development
- protection of all workers
- universal social protection
- social dialogue
World Employment and Social Outlook: Trends 2022, International Labour Organization 2022
Lucubrate Magazine, January 2022
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