The COVID-19 pandemic has made many changes and been a big turning point for all aspects of life. As businesses around the world were forced to implement a biggest reform and change ever, the job market has been transforming into a new form. What are the new challenges and opportunities for workers around the world? How will the transition trend of industry groups be? Let's take a look over the issue.
Since the beginning of COVID-19, the pandemic has been taking a toll on the labor status of people all around the globe. The impacts could be seen in the form of:
1. Rising unemployment rates
2. Cut down on wages
3. Cut down on working time
According to a report by the United Nations in April, COVID-19 is estimated to cause 195 million people around the world to lose their jobs in the second quarter of 2020.
The reports of International Labor Organization (ILO) have also predicted a number of 8.8 to 35 million more people having to encounter poverty in the world (march, COVID-19 and the world of work – impact and policy responses), while the global total working hour has declined to 14% (Monitor report no.5).
The global economy might, therefore, enter a period of depression with unprecedentedly high rates of unemployment and poverty. This could lead to a reduction in goods and services consumption which can affect the prospect of the economy in the future.
In the 4th monitor report of the ILO, it is pointed out that the 15-24 years old, beside the old one, is the age group having to bear heavier and faster impacts than the others. Specifically, the pandemic has been affecting them on 3 aspects:
It has been (i) taking away their jobs, (ii) interrupting their studying and training process, and (iii) preventing them from joining the job market or changing jobs. Those who are employed at this age also might not be secured in working environment conditions and wages.
Within these groups, immigrants and women have been the especially vulnerable groups. The women account for the majority of low-paid jobs or sectors that are strongly influenced by the pandemic, and the (im)migrants are not fully granted with labor rights and social welfare. As a result, this unequal level of impact could lead to the increase in inequality.
In respect of sectors, there are four groups that have been under the biggest influence of the crisis: food and accommodation, retail and wholesale, business services and administration, manufacturing.
As we can see from the 5th monitor report of the ILO, the Asia-Pacific area is facing the most serious impacts with the amount of working hour losses equals 235 million full-time jobs (48 hours/week) in the second quarter of 2020. The number globally have also risen with 400 jobs having been lost - 245 jobs more than the previous quarter.
In response to the unemployment crisis, the central banks and governments of countries all over the world have enacted large-scale monetary and fiscal stimulus policies. Let's take a look at the changes and support available to workers who have lost their jobs or were affected by large-scale layoffs in COVID's most impacted countries like the US and China.
In the United States, after many heavy effects from the epidemic, the country has activated a series of monetary stimulus programs. The Federal Reserve has introduced measures such as interest cuts, loans and asset purchases, and regulation changes. The US government and central bank also launched the CARES Act (The Coronavirus Aid, Relief, and Economic Security Acts) on March 27, 2020. This bailout package is worth $2 trillion, delivers on the Trump Administration's commitment at protecting the American people from the public economic world of COVID-19.
Until now, when the COVID-19 is already basically under control, the CARES Act bailout package also ended up in a number of states in America. However, it seems that the US economy has not recovered yet, leading to the consequence that unemployed workers still feel insecure when they leave government subsidies. Therefore, currently, there has been discussions in the White House for additional executive actions on another stimulus bill resume.
Like the US, as a major country heavily influenced by COVID-19, China has also been looking for a solution to an unemployment crisis with flexible jobs. There is a buzz phase that has become popular in Chinese government's policy of dealing with rising unemployment, which is “Flexible employment”, which means that the government encourages people to set up their own small shops, creating numerous part-time jobs in retailing sector, community service or online entertainment. It can be seen that the unemployment rate has decreased compared to the beginning of the year. However, according to data from job search websites, there are still about 5.9 million graduates looking for work in a shrinking job pool.
Therefore, it can be seen that in the case of China, the new government policies only help improving the overall unemployment problem instead of really go into solving the core problems.
Regarding this area in the future, it can be said that it will take quite a long time for the world to coexist with the epidemic and recover the job market. There have been signs of improvement as the epidemic gradually subsided, however, longer term solutions are needed, targeting more durable jobs such as online business, information technology, health care and clean food. Besides, we cannot help but admit that the tourism service industry will still suffer many negative impacts from the impact of this pandemic and will need a lot of time and effort to recover, also with employees who used to or are working in this field
The recovery of the global economy in general and the job market in particular will be a long, slow and step-by-step process, but we hope to see more prosperity in the near future.
References
Giles Clarke. “COVID-19: impact could cause equivalent of 195 million job losses, says ILO chief”. Economic Development. 8 April, 2020. UN News.
“COVID-19 and the world of work: Impact and policy responses”. ILO Monitor’s 1st edition. 18 March, 2020. ILO.
“COVID-19 and the world of work. Fourth edition Updated estimates and analysis”. ILO Monitor. 27 May, 2020. ILO.
“COVID-19 and the world of work. Fifth edition Updated estimates and analysis”. ILO Monitor. 30 June, 2020. ILO.
Bernard Marr. “How Coronavirus Will Change The Job Market Forever”. 15 June, 2020. Forbes.
Sidney Leng. “Coronavirus: China seeks solution to unemployment crisis with flexible jobs”. China Economy. Aug 20, 2020. The South China Sea Post.
“The CARES Act Provides Assistance to Workers and their Families”. US Department of Treasury.
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