Fundizwi Sikhondze – Coordinator for the Trade Union and Worker News-Africa.
As the battle against the COVID-19 pandemic ensures across the globe and as countries employ different strategies to manage the virus, there is very little doubt that lives and livelihoods of workers and the poor, who by and large rely on their worker power to survive, continue to bear the brunt of the crises. The wealthy and middle class can wade the storm utilising their access to economic assistance in the form of subsidies from the state, loans and from their business networks.
Workers in different countries have had access to different mechanisms provided by their respective national labour and social security legislation. Developed countries have utilised their expansive social security systems to replenish the earnings shortfalls that were brought about by lockdowns on both business and workers. On the other hand, where it relates to the developing world things are a bit more complex as the security system in most countries is hard enough and in many, it’s not there. To further complicate matters, in Africa a disproportionately high number of working-age people eke their livelihoods from the informal sector. In the informal sector, most people hardly make enough to make a comfortable living. Rather they live from their daily takings and if for one reason or another those takings stop coming in, hunger and poverty visit their families with immediate effect.
Outside the health-related challenge one of the biggest labour market challenges brought about by COVID-19 is the reduction in working hours brought about by government-imposed lockdowns. Lockdowns have also targeted informal workers who have also been advised to stay at home in the process losing a lot of earnings from their businesses activities. Even those who could stay open could not attract a good number of customers as most people were locked down at home.
To help the world understand the scourge of the challenge the International Labour Organisations (ILO) has published five editions of their ILO Monitor COVID-19 and the World of Work and from these monitors, they have estimated a gross reduction of work hours around the globe as different countries imposed different modes of lockdowns to control the spread of the COVID-19. According to these ILO Monitors documents, in Africa, around 1.7% of working hours were lost in the first quarter of 2020,a period where lockdowns were imposed only at the (around the end of March). Then in the second quarter, there were around 12.1% of working hours lost in Africa and around 16% globally.
The youth , women and migrant workers are some of the worst affected sectors of the working class in terms of losing working time. The youth are mostly working in start-up jobs with no job safety, women have the highest number of domestic jobs and migrants have the highest number of insecure jobs and were the easiest target for employers seeking to save money.
As the world moves to the second half of the year it seems that earlier predictions for a quick economic recovery have all but been dashed because in a lot of countries the COVID-19 pandemic infection rates are soaring, at the same time as the numbers rise economic realities have forced governments to open their economies again. There are however economic uncertainties that still persist and that prevent a full recovery even now.
Response to crises
The International Monetary Fund (IMF) estimates that there needs to be a response to these crises utilising fiscal tools. This shall be done in order to increase the capacity of the health systems to cope with the pandemic, replace lost household income and prevent large-scale bankruptcies. So far the IMF has recorded a figure around $11 trillion that has been dispersed to countries and as this happens public debt has been driven up to levels as high as 100% of GDP. These figures are unprecedented in the as they have even surpassed the post-world war interventions of around 70 years ago.
The stance by the IMF of advocating for the utilisation of fiscal tools rather than their usual conservative monetary policy tools comes with their realisation that the monetary tools that concentrate mainly on the interest rates will not assist economies and people this time around.
The Post COVID economy continues to shatter economies and workers lives and by the look of things the countries,in particular workers shall need to brace themselves for a longer period of pain and hardships before the economy bounces back to what they regarded as normal.