COVID-19 disrupting labour markets

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Estimates suggest that between 40-70 per cent of the world’s population could become infected with the COVID-19 pandemic. The crisis has already transformed into an economic and labour market shock, impacting not only supply (production of goods and services) but also demand (consumption and investment).

All businesses, regardless of size, are facing serious challenges, especially those in the aviation, tourism and hospitality industries, with a real threat of significant declines in revenue, insolvencies and job losses in specific sectors. Sustaining business operations will be particularly difficult for Small and Medium Enterprises (SMEs).

Following travel bans, border closures and quarantine measures, many workers cannot move to their places of work or carry out their jobs, which has knock-on effects on incomes, particularly for informal and casually employed workers.

Given the current environment of uncertainty and fear, enterprises are likely to delay investments, purchases of goods and the hiring of workers. Protecting workers and their families from the risk of infection needs to be a top priority.

Demand-side measures to protect those facing income losses because of infection or reduced economic activity are critical to stimulating the economy.

Income protection also mitigates the disincentives against disclosing potential infections, especially amongst low income and already disadvantaged groups of workers. Initial ILO estimates point to a significant rise in unemployment and underemployment in the wake of the virus.

As witnessed in previous crises, the shock to labour demand is likely to translate into significant downward adjustments to wages and working hours. The loss of labour income will translate into lower consumption of goods and services, which is detrimental to the continuity of businesses and ensuring that economies are resilient.

The International Labour Organisation (ILO) indicates that “the world of work is being profoundly affected by the global virus pandemic. In addition to the threat to public health, the economic and social disruption threatens the long-term livelihoods and wellbeing of millions.”

Secretary General of the Ghana Trades Union Congress, Dr. Yaw Baah earlier announced the cancelation of the 2020 May Day activities and celebration, citing the coronavirus pandemic as the main reason and urged all workers to stay at home on May Day, and continue to comply with all the relevant safety protocols in the fight against Coronavirus.

This year’s International Workers’ Day of Solidarity (May Day) scheduled for Friday, May 1, 2020 has been called off in compliance with the ban on public gatherings and restriction of movements in the country.

The Organised Labour May Day Planning Committee took the opportunity to congratulate all health workers, utility workers, security agencies and other essential service providers for their invaluable service to the nation in these difficult times.

Meanwhile, the Trades Union Congress (TUC), the Ghana Federation of Labour (GFL) and the Industrial and Commercial Workers Union (ICU) are seeking for tripartite engagement for workers. Leadership of all the three unions agreed that even though businesses are in a dire financial situation any decision on the fate of workers should be taken through a consensus.

According to them, a tripartite engagement between the government, employers and workers would be the best way to proffer solution to the induced economic hardship on businesses. Director of Research and Policy at the TUC, Kwabena Nyarko Otoo, mentioned that employers should desist from any decision to individually decide on the fate of workers during this time.

Mr. Otoo believes through the tripartite engagement, government could possibly find some resources to support employers to aid them to pay the salaries of workers. It is interesting to note that government has absorbed the salaries of public sector workers for three months starting from the period of the partial lockdown.

With another month coming to an end, some employers and employees are concerned about the payment of salaries as the coronavirus hits the economy hard. Some businesses are also offering salary cuts to their employees as a result of the financial mishap caused by the pandemic while other businesses have partly shut down some branches of their businesses.

Government plans to put in place a GH¢600 million soft loan scheme with a two-year repayment plan for micro, small and medium scale businesses. The Trades Union Congress (TUC) and the Ghana Employers Association have called on government to extend its stimulus support to cover big businesses amid the COVID-19 pandemic.

The government has indicated that the cumulative effect of the COVID-19 pandemic will cost Ghana GH¢9.505 billion. In spite of that Dr. Yaw Baah believes the GH¢600 million stimulus package is woefully inadequate.

Dr. Baah says the amount will not be able to restore the economy to where it was before COVID-19, and therefore government must increase the amount. Well, that may be the case but under the trying circumstances the state finds itself amidst COVID-19, we believe the amount earmarked can serve as a springboard to restore businesses to viability.

While we join the world to celebrate May Day, we are bound by the WHO health protocols to avoid public gatherings but we wish all workers a COVID-free working life and pray that a vaccine is soon developed to fight this devastating virus.

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