The COVID-19 and Impact on our Livelihoods
According to global experts, another pandemic like the 1918 influenza epidemic was inevitable. It was not a matter of if but when and how severe and fast spreading it will be. WHO has termed Coronavirus, dubbed COVID-19 as a pandemic on March 11th, 2020. In a crisis like this, leaders have to a) solve the immediate crisis and b) devise ways to increase our resilience to such outbreaks. The former being a more pressing issue but the latter has far reaching consequences and policy implications. To be able to avoid permanent damage to our livelihoods, public policy responses need to find ways to ‘timebox’ this event, not only on how to suppress the virus but also to shorten the duration of the economic shock 1.
On the economic front, policy makers will have a couple of challenges. Depending on what country, roughly about 40-60% of the employment is in small and medium enterprises. If these enterprises close down or start laying off their workers it will have a negative impact across the economy. People, even if they get unemployment subsidies, will still spend less if they don’t have jobs. Since we live in a consumer oriented economy, less consumption will have a multiplier effect on the economy. This will also make the investors wary about the future 2. Policy makers have a huge task in front of them as they have to identify ways small and medium enterprises can retain their workers during this tumultuous times.
Another challenge is that of unemployment. The global financial crisis of 2008-2009 increased unemployment by 22 million. Preliminary ILO research suggests that there could be a rise in global unemployment of between 5.3 million to 24.7 million from a base level of 188 million in 2019. Self-employment and informal employment can rise in such times as a means of survival but because of the current restrictions on travel and movement of goods, this won’t be particularly useful. The services sector, tourism and travel are especially vulnerable right now as predicted by an assessment conducted by the World Trade and Tourism Council; a decline of up to 25% in 2020 is forecasted which means millions of jobs are at risk3. This will be a huge test for policy makers and governments on how they will support those who work in the informal sector and those who are self-employed.
Global and regional supply chains have been disrupted which means the private sector has to lead the way in supporting its employees. At a time like this, Unilever has offered 500m Euros to support livelihoods across its extended value chain through a) providing early payments to their most vulnerable small and medium sized suppliers thus aiding them with financial liquidity and also extending credit to some of their selected small-scale retail customers whose business solely relies on Unilever, to help them protect their jobs 4.
COVID-19 crisis has also brought to light the dismissal state of social protection systems and how they are failing the most vulnerable. ILO’s Social Protection Floors Recommendation, 2012 (No. 202), adopted by the international community, committed to establish minimal levels of social protection. However, almost 55% of the world’s population, about 4 billion people do not benefit from any form of social protection. This means an overwhelming number of workers don’t have the economic security to take sick leave or cope with unexpected emergencies like COVID-19. Almost 40% of the world’s population doesn’t have health insurance or access to health services, 100 million fall into poverty because of medical expenses, this will only be exacerbated because of the health crisis the world is facing. However, countries have ramped up their efforts to give economic support to businesses and households. Hong King, the UK, SAR of China and Ireland are giving sickness benefits to self-quarantined or quarantined workers. Netherlands and Germany are offering partial unemployment benefits to workers whose hours have been cut because of decreasing demand. China, Portugal and Australia have extended social assistance for vulnerable populations. China, Switzerland, France and Portugal have broadened eligibility for unemployment benefits to businesses and their workers that have been shut down temporarily5. According to a census in 2017, there are 10 million people or 1.4 million families in Sindh, Pakistan who work on daily wages and are the most vulnerable because of the lockdown of the province since March 23rd. The Sindh Government has launched an online portal on which welfare agencies can register themselves and work with the government to provide food and necessary items to these daily wage workers6. The Government of Pakistan has also announced a relief package for low-income groups who will be provided a stipend of Rs, 3000 (US 20$) for the next four months and will also these families to pay gas and electricity bills below a certain amount in installments7.
It is important to also look at other groups of people who have become vulnerable because of the pandemic. Forgetting their needs can lead to unfavorable outcomes and can trigger worsening inequalities. According to WHO, globally, an estimated one billion people live with some form of disability. For some social distancing might not be an easy task as they require support or assistance from others and for others, maintaining basic hygiene to keep the virus at bay, might not be easy either. Additionally, those with disabilities could develop a severe case of the disease if they do get infected as it can worsen existing health conditions. In times like these, access to financial aid is pertinent, so as to stop people with disabilities and their families from falling into greater poverty. Business owners should allow them to work from home and give them paid family leave to guarantee their income security8.
Some organizations are taking lead and coming up with action oriented plans to combat the pandemic. World Economic Forum (WEF) has launched an Action plan to help coordinate the needs and ideas of the private sector as announced by Arnaud Bernaet, WEF’s Head of Global Health and Healthcare. It calls for international organizations, social entrepreneur’s, civil society, members and non-members to come up with creative ideas on how activities could be organized to save jobs as WEF realizes that this cannot be done in silos and has to be a coordinated effort9.
Mitigating the impact of COVID-19 on a global scale is too big and too urgent for any single entity to address by themselves. Businesses and government leaders need to work together, to harness leading practices and catalyze a joint response. It is crystal clear that all workers irrespective of their employment contracts need to able to access basic health care, income and benefit support and now is a good time to rebuild and restructure the systems we already have in place.