The Covid-19 infection, that was last week declared a pandemic by the World Health Organization, could cause 25 million people worldwide to lose their jobs.
Based on multiple scenarios assessing the impact of Covid-19 on global GDP growth, the International Labour Organisation (ILO) estimates suggest a sharp spike in unemployment of between 5.3 million (low) and 24.7 million (high) from a base level of 188 million in 2019.
Underemployment is expected to be triggered on a much broader scale, with the fallout of the coronavirus translating into truncated working hours and salaries, official news agency WAM reported.
Self-employment in developing countries, which often mitigates economic impacts, may not happen this time because of restrictions on freedom of movement and goods.
Income losses for workers are estimated between $860bn and $3.4 trillion by the end of 2020, causing a dip in the consumption of goods and services, negatively affecting businesses and economies.
Working poverty is expected to grow considerably too, as “the strain on incomes resulting from the decline in economic activity will devastate workers close to or below the poverty line”.
The ILO estimates that between 8.8 and 35 million additional people will be in working poverty across the globe, compared to the original estimate for 2020 which projected a dip of 14 million worldwide.
“This is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on people,” said ILO director-general Guy Ryder.
“In 2008, the world presented a united front to address the consequences of the global financial crisis, and the worst was averted. We need that kind of leadership and resolve now,” he added.
Certain groups such as people in less protected and low-paid jobs, particularly youth, older workers, women and migrants will be disproportionately impacted, fostering inequality.