The World of International Organizations

ILO: Pandemic dwarfs global financial crisis

Boarded up U.S. shops in Maui, Hawaii during the COVID-19 pandemic (AN/Michael Paul Johnson)
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The U.N. labor agency estimated on Monday that job losses in 2020 due to the coronavirus pandemic were four times greater than those during the 2008-2009 global financial crisis.

The equivalent of 255 million full-time jobs were lost last year, according to a new report from the Geneva-based International Labor Organization. Those represent 8.8 percent of all work hours worldwide. ILO said they vanished due to lockdown restrictions that governments imposed on businesses and citizens.

More than 140 million people lost their jobs outright, while the rest lost working hours. As many as 81 million people left the job market altogether because they were unable to find more work, ILO reported, in part due to widespread COVID-19 restrictions on businesses like bars, hotel, restaurants and stores.

The huge job losses removed US$3.7 trillion of income from the world economy, equivalent to 4.4 percent of global GDP, dwarfing even the impact of the global financial crisis that began in September 2008 when Lehman Brothers, a huge global bank, collapsed and nearly brought down the world’s financial system.

ILO reported that women and youth were the worst-hit, particularly working mothers who had children to care for at home. It said it expected jobs to start returning in the second half of 2021 depending on the pace of coronavirus vaccine rollouts and other progress towards limiting the spread of infections, which has risen to 99.5 million people with 2.1 million deaths globally.

“This has been the most severe crisis for the world of work since the Great Depression of the 1930s. Its impact is far greater than that of the global financial crisis of 2009,” ILO Director-General Guy Ryder told a press briefing. He said it was “particularly concerning” that so many people left the labor market.

“These people simply dropped out of the labor market. Either they are unable to work, perhaps because of pandemic restrictions or social obligations, or they’ve given up looking for work,” said Ryder.

“And so their talents, their skills, their energy have been lost — lost to their families, lost to our society, lost to us all. And, in addition, our data shows that women and young people are more likely to have been affected,” he said. “I think a key point here is that this move, this shift to inactivity, far outweighs the impact on unemployment.”

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