According to a UN agency's recent report, nearly 25 million jobs could be lost across the world due to the coronavirus pandemic, however, a coordinated international policy response can help lower the impact on global unemployment.
In its preliminary assessment report titled "COVID-19 and world of work: Impacts and responses", the International Labour Organization (ILO) calls for urgent, large-scale and coordinated measures across three pillars - protecting workers in the workplace, stimulating the economy and employment, and supporting jobs and incomes.
The ILO said that these measures will have to include extending social protection, supporting employment retention (i.e short-time work, paid leave, other subsidies), and financial and tax relief, including for micro, small and medium-sized enterprises (MSMEs).
Fiscal and monetary policy measures along with lending and financial support for specific economic sectors was also proposed.
The economic and labour crisis created by the COVID-19 pandemic could increase global unemployment by almost 25 million, the ILO said.
"However, if we see an internationally coordinated policy response, as happened in the global financial crisis of 2008/9, then the impact on global unemployment could be significantly lower," it added.
The report provides different scenarios of how unemployment and underemployment will be impacted due to the coronavirus.
Based on different scenarios for the impact of COVID-19 on global GDP growth, the ILO estimates indicate a rise in global unemployment of between 5.3 million ("low" scenario) and 24.7 million ("high" scenario) from a base level of 188 million in 2019. By comparison, the 2008-09 global financial crisis increased global unemployment by 22 million.
Underemployment is also expected to increase on a large scale, as the economic consequences of the virus outbreak translate into reductions in working hours and wages.
Self-employment in developing countries, which often serves to cushion the impact of changes, may not do so this time because of restrictions on the movement of people (eg service providers) and goods, it said.
The note said that falls in employment also meant large income losses for workers to the tune of between $860 billion and $3.4 trillion by the end of 2020. This will translate into falls in consumption of goods and services, in turn affecting the prospects for businesses and economies.