A new research by the International Labour Organization (ILO) has indicated the need for immediate support for enterprises and workers in the informal economy, saying they are the hardest hit by the COVID-19 pandemic.

Called "ILO Monitor 2nd Edition: COVID-19 and the World of Work,” which was released on Tuesday, April 7, the research recommended that specific and targeted measures are needed in countries with high levels of informal employment, including cash transfers to support those who are most affected by the lockdown.

It also proposed repurposing production to provide alternative employment such as personal protective equipment kits—specialised clothing or equipment worn by employees for protection against infectious materials.

This, the report adds, needs to be supplemented by efforts to ensure adequate supply of food and other essentials.

Local community-based initiatives can work quickly and cater for specific needs, and should include representative organisations of those in the informal economy, it states.

Indeed, the study warned, no matter where in the world or in which sector, the crisis is having a dramatic impact on the world’s workforce.

It recommended that policy responses immediate relief to workers and enterprises in order to protect livelihoods and economically viable businesses, particularly in hard-hit sectors and developing countries, thus ensuring the conditions for a prompt, job-rich recovery once the pandemic is under control.

"Limited public resources need to be used to encourage enterprises to retain and/or create jobs,” it said.

Lockdown measures affect 2.7 billion workers

The study revealed that COVID-19 pandemic has accelerated in terms of intensity and expanded its global reach, with full or partial lockdown measures now affecting almost 2.7 billion workers, representing around 81 per cent of the world’s workforce.

In the current situation, it said, businesses across a range of economic sectors are facing catastrophic losses, which threaten their operations and solvency, especially among smaller enterprises, while millions of workers are vulnerable to income loss and layoffs.

"Workers and businesses are facing catastrophe, in both developed and developing economies... We have to move fast, decisively, and together. The right, urgent, measures could make the difference between survival and collapse,” said Guy Ryder, ILO’s Director-General.

The impact on income-generating activities is especially harsh for unprotected workers and the most vulnerable groups in the informal economy.

It exposed that employment contraction has already begun on a large (often unprecedented) scale in many countries.

Changes in working hours, which reflect both layoffs and other temporary reductions in working time, give a better picture about the dire reality of the current labour market situation, the research indicated.

Using this approach, as of 1 April 2020, the ILO’s new global estimates indicate that working hours will decline by 6.7 per cent in the second quarter of 2020, which is equivalent to 195 million full-time workers.

The study pointed out that the final tally of annual job losses in 2020 will depend critically on the evolution of the pandemic and the measures taken to mitigate its impact. For this reason, the ILO will continue to monitor the situation and regularly update its estimate of working hours lost and equivalent employment loss.

The majority of job losses and declining working hours will occur in hardest-hit sectors.

The ILO estimates that 1.25 billion workers, representing almost 38 per cent of the global workforce, are employed in sectors that are now facing a severe decline in output and a high risk of workforce displacement.

Key sectors include retail trade, accommodation and food services, and manufacturing.

Particularly in low- and middle-income countries, hard-hit sectors have a high proportion of workers in informal employment and workers with limited access to health services and social protection. 

Without appropriate policy measures, workers face a high risk of falling into poverty and will experience greater challenges in regaining their livelihoods during the recovery period, the study cautioned.