World of Work Report: ILO | 25 May 2022

Why in News?

Recently, the International Labour Organization(ILO) has released the Ninth Edition of ILO Monitor on the World of Work Report, which says that after significant gains during the last quarter of 2021, the number of hours worked globally dropped in the first quarter of 2022, to 3.8% below the employment situation before the Covid-19.

• The fresh lockdowns in China, the conflict between Ukraine and Russia, and the global rise in the prices of food and fuel are cited as the main reasons for the findings.
• The report gives a global overview of how countries are tackling an uneven labour market recovery that has been further undermined by developments such as the Russian aggression against Ukraine, increases in inflation, and continuing strict Covid-19 containment measures.

What are the other Findings of the Report?

• Global:
  • Reduction in Working Hour:
    • Both India and Lower-Middle-Income countries experienced a deterioration of the gender gap in work hours in the second quarter of 2020.
    • However, because the initial level of hours worked by women in India was very low, the reduction in hours worked by women in India has only a weak influence on the overall performance of the lower-middle-income countries.
    • In contrast, the reduction in hours worked by men in India has a large impact on the overall performance.
  • Divergence Between Richer and Poorer Economies:
    • A great and growing divergence between richer and poorer economies continues to characterise the recovery.
    • While high-income countries experienced a recovery in hours worked, low- and lower-middle-income economies suffered setbacks in the first quarter of the year with a 3.6 and 5.7% gap respectively when compared to the pre-crisis benchmark.
  • Workplace Closures Continue to Trend Downwards:
    • After a brief spike at the end of 2021 and early 2022, workplace closures are currently on a downward trend.
    • While most workers still live in countries with some form of workplace restrictions, the strictest form of closure (economy-wide required closures for all but essential workplaces) has nearly disappeared.
    • These recent reductions in strict workplace closures were particularly pronounced in Europe and Central Asia, where currently 70% of workers face either only recommended closures or none at all.
  • Divergence in Employment Recovery Trends:
    • In line with the overall divergence in hours worked, employment levels had recovered in most high-income countries by the end of 2021, while deficits remained significant in most middle-income economies.
    • The divergence in the employment-to-population ratio from the last quarter of 2019 had been mostly eliminated by the end of 2021.
  • Labour Incomes have not yet Recovered:
    • In 2021, three out of five workers lived in countries where average annual labour incomes had not yet recovered to their level of the fourth quarter of 2019.
    • Workers in low-, lower-middle and upper-middle-income countries (excluding China) still faced reduced labour incomes in 2021, at rates of –1.6 %, –2.7 % and –3.7% respectively.
  • Informal employment was impacted more, especially for women, but has rebounded faster than formal employment:
    • Displaced workers from the formal economy, for instance, resort to informal employment to earn a living, while those already in informal employment remain at work.
    • For this reason, changes in informal employment during economic downturns tend to be smaller than those in formal employment.
• India:
  • For every 100 women at work prior to the pandemic, 12.3 women would have lost their job as an average through the entire period considered by the report.
  • In contrast, for every 100 men, the equivalent figure would have been 7.5.
  • Hence, the pandemic seems to have exacerbated the already substantial gender imbalances in employment participation in the country.
  • Women employment in India has come down, particularly in sectors such as healthcare as a result of the Covid-19 pandemic.

What are the Recommendations?

• The purchasing capacity of the workers should be improved. ILO has been proposing decent jobs and decent wages.
  • In India, most people are on contract without any social security. If there are no decent wages, purchasing power will also come down. The Code on Wages was passed in 2019 but is not yet implemented.
• A human-centred recovery that establishes sustainable development paths towards a brighter and more inclusive future of work is more urgent than ever. Such an approach was agreed by tripartite consensus of the ILO’s 187 Member States at the 109^th International Labour Conference in June 2021, which adopted the Global Call to Action for a Human-Centred Recovery from the Covid-19 crisis that is inclusive, sustainable and resilient, providing a detailed set of recommendations addressed to governments, employers’ and workers’ organizations and the international community.
• With the multiplication of risks, especially for the most vulnerable, timely and effective support is needed to protect and maintain the purchasing power of labour income and overall living standards.
• With combating inflation emerging as a policy challenge, macroeconomic policies need to be adjusted carefully. At the same time, emerging markets and developing countries will face headwinds resulting from monetary policy tightening in advanced economies, which will require prudent management of financial flows.
• To promote recovery over the longer term, well designed sectoral policies are needed to promote the creation of decent jobs, while aiming at formalization, sustainability and inclusiveness.
• Targeted policies to assist transitions of people during the recovery period also remain important, including a focus on vulnerable groups and improving work conditions for those in informal employment and helping them transition to the formal economy.
• To contribute to resilience and fairness in the labour market, these efforts need to be matched by strong labour market institutions, collective bargaining and social dialogue that respect international labour standards.
• A comprehensive approach towards ensuring urgently needed social protection (including health-related measures) and promoting decent job creation to foster just transitions can make a major difference.
  • In this regard, the Global Accelerator for Jobs and Social Protection for Just Transitions, with its aim of creating at least 400 million jobs by 2030, primarily in the green, digital and care economy, and extending social protection floors to over 4 billion people currently not covered, is an important initiative.
• Among many other goals, it needs to promote an enterprise-enabling environment, develop human capabilities that can expand productive capacities, protect people and create more decent jobs in a context of reinvigorated social dialogue and full application of labor standards.

Source: TH