Anna, in Texas, lost her job at the hotel cafeteria where she worked. Her fiancé was also laid off, and her 19-year-old daughter is now helping to pay the bills. Meanwhile, in South Africa, Bornwell (a Zimbabwean) has just lost his salary from the restaurant he had managed to build after 12 years in the country. He, like millions of others, has no fallback because he is a foreigner. In Norway, where emergency legislation now requires only two days’ notice, Christin was laid off when her gym closed. In the UK, emergency legislation was not needed for employers to do the same to a Tom, Rob or Rebecca. Nor did employers in Italy require special legislation in order to sack a Luigi, Umberto or Vanessa. Nor in Iran, where an Ahmed or Mohamed were furloughed. There are millions of these examples … all over the world.
“Not my problem,” you may think, if you are living on a government salary, research grant or a high-level corporate arrangement. Yet, you will soon be reminded of how fragile the ground we all walk on is when the world’s current crises have morphed into massively escalating inequality and new pandemics of political polarisation, conflicts and violence explode around the globe. Because millions of people without pay-cheques are not going to sit quietly, watching elites — who ignored the warning signs of this crisis — continue to enjoy their decadent lifestyles. Brace yourselves for the worst or act now. Never has the truth that we are only as strong the weakest link in the chain felt more salient. For, if any part of the chain is infected with the coronavirus, we will all soon be.
Unemployment is skyrocketing all around the world. Disruptions in production, initially in Asia, have spread to supply chains across the world. According to the International Labour Organisation (ILO), all businesses face challenges. Initial ILO estimates (as of March 18) set unemployment to increase to between 5.3 and 24.7-million people globally due to the virus, from a base-level of 188-million unemployed in 2019. This may well prove to be a significant underestimate as the scale of the crisis grows. Overall, losses in labour incomes are estimated by the ILO to range between $860-billion and $3.4-trillion. Numbers of the working poor, which is just a nicer way of saying that people are working for poverty or starvation wages, are also likely to increase significantly by between 20 to 35-million people. If you think this will only happen in developing countries, you are wrong.
Although the numbers in developing countries will be enormous, a substantial portion of the rise in unemployment and underemployment, will happen in high-income countries. In Norway, unemployment has doubled — the highest it has been since World War II. In South Africa, a country with the world’s highest levels of inequality and more than half the workforce in unemployment or underemployment before the crisis, at least 1.5-million jobs are at risk and more than 3-million informal sector workers are forced to stay at home, while not receiving unemployment benefits. A record 6.6-million Americans applied for unemployment last week, reflecting the largest jump in new jobless claims in US history. Every country will be affected.
Ducking the problem, hiding the figures or waiting to act is the wrong approach. The right approach is to step up, take responsibility and make policies and provide packages that address the problems. These steps have to be taken now unless we want to make the pandemic more difficult to manage and simultaneously increase the likelihood of new crises growing out of it. The International Trade Union Confederation has identified several constructive steps taken around the globe. Governments are putting in place policies for paid sick leave, wage and income support including for self-employed and gig-economy workers, as well as loan relief and enhanced public health measures. Too often, however, the delays to receive wages or income support are putting undue hardship and stress on families.
covid-19 in sa
China instructed employers to guarantee paid sick leave to everyone in quarantine or under medical observation. In the UK, sick pay is now applicable from the first day off of work. Many central banks cut interest rates to help both corporations and people struggling with mortgages. Ireland, Singapore, and South Korea have made sick pay and leave available for the self-employed. Financial support to specific sectors has also been announced in many countries, and cash transfers have been organised in some. In Hong Kong, China for example, adult residents will receive a one-time cash transfer of $1280, and in the US $1200 cheques will be issued to single adults earning $75 000 a year or less. But what happens when the cheque is spent?
Recommendations from the ILO underline the immediate need to prioritise health protection for workers, while simultaneously emphasising the need for timely, large-scale and coordinated policy efforts to provide employment and income support. The most vulnerable are not high-paid corporate leaders, but the low-paid workforce who, by the way, are often the groups that we rely on to deliver our health services, food supply, deliveries and utilities. This is not the time to lay off workers or send them home on “voluntary” unpaid leave. Why should organisations that live off government funding be allowed to send workers on unpaid leave while they keep their subsidies? Why should governments buy out companies with huge support packages if they simultaneously furlough their workforce and/or pay out huge salaries to corporate leaders or shareholders? Why should economic relief packages continue to be based on a trickle-down theory, if none of it is trickling down, either in the short- or long-term? This was the 2008 financial crisis’s main methodology, which had a huge effect on inequality and was followed by drastic political polarisation and anger.
This is the time to extend social protection to all. In the short-term, protection of health workers is critical. In the medium-term, we need lending and financial support to specific sectors, but again implemented through a redistribution lens. In the short-, middle- and long-term we need negotiated packages between the state, employers and trade unions with a simultaneous appeal to the latter two to assure that they are representative and support building strong organisations. Because we will need civil society and strong democratic institutions in the period ahead of us.
The hope that this is just a short-term crisis is dwindling. The likely worst-case scenario is that we will have tens of millions of people newly unemployed, underemployed and working poor in our midst after the crisis. They are likely to be more exposed to the health crisis, simply because they don’t have money to pay for tests, medical or protective equipment, or their communities do not have the medical infrastructure. They will also be dealing with a new set of financial struggles and health risks, combined with emotional scars from months of isolation and grief, as well as growing desperation, frustration and anger. Revolutions have grown out of less.
We need global solidarity and co-ordination on a larger scale, equal to the response after World War II. It must begin with a global fund for social protection targeting the poorest of countries. Free healthcare, income support, food and water must be at the heart of delivering the Sustainable Development Goals, including the goal to end poverty in all its forms everywhere and to ensure healthy lives and promote well-being for all, at all ages. Leaders have a choice now: to distribute packages from the top or to stimulate the economy from the bottom. Let us learn from the mistakes of the 2008 financial crisis, and avoid its disastrous aftermath, by assuring that crisis transition and reconstruction this time is generated from the bottom-up.
Let’s be sure to distribute emergency packages to the most vulnerable first, not only because they need it most, but because countries that have historically followed such paths have generally transitioned most effectively by getting their economic growth and development up and running again the fastest. We must lay the foundations for a new social contract to ensure that the global goal of decent work and inclusive and sustainable economic growth, as well as full employment, is at the heart of a sustainable recovery effort that also takes into account the climate emergency we continue to face. The plans for what we need to do — as set out in the Sustainable Development Goals — are ready and waiting.
So, brace yourselves for the worst … or act. Now.
Liv Tørres is the director of the Pathfinders for Peaceful, Just and Inclusive Societies, hosted by the Centre on International Co-operation at New York University and Sharan Burrow is general secretary of the International Trade Union Confederation