ILO urges social spending against growing poverty

The International Labour Organization (ILO) on Monday urged sustained social spending and other changes to counter the economic fallout caused by the novel coronavirus pandemic.

ILO chief Guy Ryder made his recommendations on behalf of the global body representing workers, employers and governments to the annual meetings of the World Bank and the International Monetary Fund (IMF).

"The world economy needs to find a new, or at least supplemental engine of economic recovery," said Ryder underlining that countries must respond to the dangers of growing poverty, joblessness and inequality.

He argued that the pandemic had severely disrupted the fundamental building blocks of economic and social progress, including widely available employment, skill development, decent working conditions, sustainable enterprise, adequate social protection and increased gender equality, as well as rising productivity, purchasing power and consumer and investor confidence.

The current trends translate into substantial losses in labor income with an estimated global decline of 10.7% during the first three quarters of 2020, compared with the corresponding period in 2019, amounting to 5.5% of GDP.

As a result, poverty levels are increasing, so income support measures for vulnerable and hard-hit groups should be a policy priority, said the ILO.

Ryder's submissions came amid growing worldwide concern about the impact of the virus outbreak on jobs and as the World Economic Forum announced it would release a new Future of Jobs Report 2020 on Wednesday.

Ryder outlined the particularly severe impact of COVID-19 on many of the world's two billion informal workers, whom he said had little protection. These include temporary, domestic or migrant workers, he explained

"While some have access to sick leave and health services and continue to receive a salary, for many of those at the bottom of the income distribution, the consequences of COVID-19 have been catastrophic," asserted Ryder.

"The COVID-19 crisis has exposed deep-rooted inequalities. Without profound structural changes, these will merely intensify, with consequences that would be very difficult to predict."

Working-hour losses due to workplace closures are reflected in higher levels of unemployment and inactivity, with inactivity increasing to a greater extent than unemployment.

Also, the decline in employment is more significant for women than for men in most countries.

The organization said the impact of fiscal stimulus measures on employment has been positive, but uneven.

In high-income countries, the announced fiscal stimulus measures amount to 10.1% of total working hours, while estimated working-hour losses averaged 9.4%, it added.

"In low-income countries, the stimulus is equivalent to only 1.2% of total working hours, while working-hour losses averaged 9%," it noted.

This "fiscal stimulus gap" is, therefore, around $982 billion in low-income and lower-middle-income countries.

Ryder called for post-COVID-19 policy frameworks to be consistent with international human rights principles and social security standards.