The visible crisis
The threat from Coronavirus is far from over. Researchers and scientists are yet to tell us that the pandemic has peaked and we are all set to witness a decline. Besides, there is no positive news with regard to development of a vaccine in the developing world suggesting that things may not be that easy for the people as they seem to be.
The biggest concern among the people worldwide is that the covid-19 crisis is leading to unemployment and job losses.
In Europe unemployment rose for a fifth straight month in August amid concern that extensive government support programmes won’t be able keep many businesses hit by coronavirus restrictions afloat forever.
The jobless rate rose to 8.1% in the 19 countries that use the euro currency in August, up from 7.9% in July. Some 13.2 million people were unemployed and the number of those out of work rose by 251,000.
Economists expect a further rise as wage support programs expire, while an increase in infections in many countries has increased fears that some restrictions on business interaction may have to be re-imposed.
Experts are suggesting that nearly 25 million jobs could be lost worldwide due to the coronavirus pandemic.
In a 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 these measures 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.
Reports have suggested that the economic and labour crisis created by the COVID-19 pandemic could increase global unemployment by almost 25 million. 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.
The situation in India also seems to be quite alarming as the growth rate and job creation has been witnessing a steep decline. The crisis seems to be deepening as the government had to borrow Rs 4.34 lakh crore in the second half of the current fiscal to meet its expenditure requirement amid COVID-19 crisis.
The Budget has pegged fiscal deficit at 3.5 per cent for the current fiscal, down from 3.8 per cent of the GDP in the last financial year.