COVID-19: How social and economic sectors are responding

The COVID-19 crisis is having a devastating effect on all social and economic sectors. In a series of briefs, the ILO analyses how the pandemic is affecting the functioning of these sectors and how they are responding to alleviate its effects.

The COVID-19 crisis is having a devastating effect on workers and employers in all sectors. Workers in essential services such as health and frontline emergency response are at high risk of infection. Grocery workers, flight attendants and autoworkers, are among those who have seen both their health and livelihoods threatened by the pandemic.

In a series of briefs the ILO has captured the impact of the crisis on several social and economic sectors, including public emergency services (PES), health services, education, food retail, automotive, tourism, civil aviation, agriculture, maritime shipping and fishing, and the textiles, clothing, leather and footwear (TCLF) industries.

The briefs reveal a picture of courage shown by the public emergency and health workers that fight the pandemic, and by the teachers, seafarers, shop keepers and other essential workers that keep our societies functioning.

They also reveal massive losses, both of output and jobs across all sectors. Developing countries will be hit hardest, and poverty is on the rise.

The analysis also outlines the drastic measures taken by governments, employers and workers to contain the virus and limit the damage to enterprises, livelihoods and the wider economy.

These measures have focused on four immediate goals: Protecting workers in the workplace; supporting enterprises, jobs and incomes; stimulating the economy and employment; and relying on social dialogue based on international labour standards to ensure that countries and sectors recover quickly and better.

“Many of our member States are taking unprecedented measures to protect frontline workers and to lessen the impact on businesses, livelihoods and the most vulnerable members of society,” said Alette van Leur, Director of the Sectoral Policies Department of the ILO. “We must increase investment in safe and decent working conditions for frontline workers and ensure that this pandemic does not leave long-lasting scars on economies, people and jobs.”

Sector snapshots

The travel and tourism sector – which prior to the COVID-19 outbreak, was expected to make up 11.5 per cent of global Gross Domestic Product (GDP) – has been particularly hard hit. The European Union’s tourism industry is estimated to be losing around €1 billion in revenue per month as a result of the outbreak.

The impact on employment in the shipping sector, which has two million seafarers, is substantial. The cruise sector, with 250,000 seafarers, has been particularly badly affected, as some countries have advised against travel by cruise ship and major cruise companies have suspended operations.

The automotive industry is also struggling with an abrupt and widespread stoppage in economic activity, as workers are told to stay at home, supply chains grind to a halt and factories close. In 2017 direct employment in the industry was estimated at nearly 14 million workers, globally.

Due to the severity of travel restrictions and the expected global recession, the International Air Transport Association (IATA) estimates that industry passenger revenues could plummet by US$252 billion, 44 per cent below the 2019 figure.

In the textiles, clothing, leather and footwear (TCLF) industries, quarantine measures have suppressed consumer demand. In Bangladesh order cancellations have led to lost revenue of around US$3 billion, affecting some 2.17 million workers.

Agriculture and food security has also been badly affected. For example, the recent temporary suspension of one of the world’s largest tea auctions in Mombasa, Kenya, where tea from many eastern African countries is traded, could have a devastating effect on local, national and regional economies if it is prolonged.

Responses

In response, countries have taken steps to bolster key sectors and lessen the socioeconomic impact of the pandemic. Measures include economic assistance packages, tax moratoriums, extended deadlines, social security contributions, as well as wage subsidies, loans and guarantees for workers.

Spain has extended a credit line of €400 million to cover all Spanish business enterprises and self-employed workers in the passenger transport, hospitality and restaurant industries.
In Namibia, the Economic Stimulus and Relief Package includes Namibian dollars (NAD) 200 million of guarantees for low-interest loans for farmers and agricultural businesses, including cash flow-constrained farmers and agricultural SMEs that have experienced a significant loss of revenue. A one-time Emergency Income Grant of NAD 750 will be provided to all formal and informal workers who have lost their jobs.

In Japan, the government, working with the Japan Automotive Manufacturers Association (JAMA), has set up the Novel Coronavirus Countermeasures Examination Automobile Council, to share information between car manufacturers, auto part and component suppliers.

In addition to increasing spending on health, some countries are also allocating more resources to police forces to help implement mitigation measures. For example, in Australia, the United Kingdom and the United States, police forces have been strengthened to help them implement pandemic mitigation measures, including through training and the supply of personal protective equipment (PPE).

In Argentina an agreement between the federation of health workers’ associations and the Government provides a guarantee that all health-care workers will continue to earn full salaries while in quarantine, and will be eligible for free transport during the pandemic, subsidized by the Government.

Textile factories in some regions of Sri Lanka have temporarily shut down under government directives, with workers entitled to paid leave. In Cambodia, suspended workers can receive 40 per cent of their salary from their employer and an additional 20 per cent from the government. Cambodia also suspended National Social Security Fund contributions for garment and textile factories who have been affected by a shortage of raw materials because of COVID-19.

In all the affected sectors the ILO has urged governments to extend social protection to all and is advising on measures to promote employment retention, short-time work, paid leave and other subsidies, to ensure that the economies, labour markets and industries will become stronger, more resilient and more sustainable when the pandemic resides.