GENEVA — More than 436 million businesses worldwide are at a high risk of very serious disruption due to the severe economic effects of the coronavirus pandemic, a report by the International Labour Organization said Wednesday.
“In the wholesale and retail business, which is the hardest hit, the expectation is that 232 million enterprises are at risk of severe disruption,” said Guy Ryder, ILO director-general.
Other sectors of the economy that are hardest hit, he said in a virtual news briefing, include the manufacturing sector (111 million enterprises), accommodation and food services (51 million) and real estate and administrative business services (42 million).
“Millions of businesses around the world are barely breathing,” Ryder said.
According to the ILO’s latest study on COVID-19 and the world of work, compared to pre-crisis levels, global working hours in the second quarter “are expected to be 10.5 percent lower.…This is equivalent to 305 million full-time jobs, which is a significant deterioration on the previous estimate of 195 million for the second quarter.
“This has been driven mainly by the prolongation and extension of containment measures,” the report said.
ILO labor economists estimate that the proportion of workers living in countries with workplace closures has “decreased from 81 to 68 percent over the last two weeks, mainly driven by the lifting of workplace closures in China. The situation has worsened elsewhere.”
The report argues that government policies need to focus on providing income support for both businesses and workers to maintain economic activities. This should include, it says, the provision of temporary subsidies to firms “to cover labor costs and extension of credit lines and loan guarantees at concessional terms to support employment retention.”
The report also warns that the most vulnerable in the global labor market, the 1.6 billion workers in the informal economy, and characterized by lack of basic protection,” are significantly impacted” by the lockdown measures.
“Staying home means losing their jobs, and without wages, they cannot eat,” warns the ILO study and notes that “income support for workers and enterprises operating in the informal economy is critical to prevent them from plunging far further into poverty.”