Pandemic costs Asia-Pacific 81 million jobs & may plunge additional 25 million people into poverty

Some 81 million people have lost work across the Asia-Pacific this year, as the Covid-19 pandemic created turmoil in the region’s labor market, the International Labour Organization (ILO) has found.

The regional unemployment rate may range between 5.2 percent and 5.7 percent in 2020, up from the 4.4 percent seen last year, the UN body predicted in its latest report. Nearly all economies saw a year-on-year contraction in employment levels, the ILO said.

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“Covid-19 has inflicted a hammer-blow on the region’s labor markets, one that few governments in the region stood ready to handle,” Chihoko Asada Miyakawa, ILO assistant director general and regional director for Asia and the Pacific said in a statement. “Low levels of social security coverage and limited institutional capacity in many countries have made it difficult to help enterprises and workers back on their feet.”

The coronavirus crisis has led to a massive drop in working hours, affecting the livelihoods of millions of people, with young people and women hit hardest. According to the report, the youth share in overall employment loss was between three and 18 times higher than their share in total employment.

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The pandemic has had a disproportional impact not only in terms of gender and age, but also across different countries of the region. The geographical gap is driven by South Asia, where employment levels fell by nearly 50 million, or around seven and a half percent, compared to the pre-crisis baseline. It has also seen the highest drop in workers’ income.

East Asia is estimated to see some 16 million jobs wiped out by the crisis, followed by South-East Asia, with 14 million jobs lost, and the Pacific Islands, with a 0.5 million drop.

Fewer paid hours significantly reduced wages across the Asia-Pacific. The ILO estimates that labor income declined by as much as 9.9 percent between January and September, which amounts to a 3.4 percent loss in gross domestic product (GDP).

With millions working less or having no work at all, the region may face increased poverty, the organization warned. Between 22 million to 25.4 million people “could be added to the number of working poor,” meaning that they survive on less than $1.90 a day, the report said. Thus, the total number of working poor in the Asia–Pacific region would rise to between 94 and 98 million this year.

“As with previous shocks, too many workers have been pushed backwards into poverty,” the ILO said in the report. It added that without support measures for the most vulnerable, “the region’s economies, workers and enterprises are struggling to bounce back from the crisis and to make progress towards inclusive growth.”

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