In the wake of the ongoing COVID-19 pandemic, the International Labour Organization (ILO) has issued a stark warning: nearly half of the global workforce could see their livelihoods decimated. This statistic is particularly troubling as it includes the many individuals who make up the informal economy.
The Impact on Informal Workers
Informal workers are facing unprecedented risk amidst the global pandemic. Unfortunately, there’s no easy solution. These workers, 1.6 billion individuals in total – around three quarters of the global workforce – are suffering enormous damages to their earning capabilities due to the COVID-19 lockdown. With alternative incomes virtually non-existent, these workers and their families face an uncertain future.
The global workforce consists of an estimated 3.3 billion people, more than two billion of whom operate within the informal economy.
Most Affected Sectors
Not all industries are created equal, especially when it comes to the brunt of the impact from the COVID-19 pandemic. Those hit hardest are set to be accommodation and food services, manufacturing, wholesale and retail trade, real estate, and business activities.
ILO’s Suggestions for Combating the Crisis
In order to overcome this crisis, ILO suggests urgent, targeted, and flexible measures that will specifically support those in the informal economy as well as other vulnerable sectors. To reactivate the economy, a job-rich approach is recommended, backed by stronger employment policies and more comprehensive social protection systems.
Moreover, coordinating international stimulus packages and debt relief measures is also crucial to ensure a sustainable and effective recovery. As existing international labour standards already enjoy tripartite consensus, they can be used as a framework for these efforts.
Understanding the Informal Sector
The informal sector refers to a part of the economy that goes untaxed and unmonitored by the government. Often, it presents key economic opportunities for impoverished individuals who may lack formal education and training. However, its key characteristics include the absence of stable employer-employee relationships and a small scale of operations.
Notably, the informal sector’s contributions are not included in GDP computations. In India, the government introduced the Pradhan Mantri Shram Yogi Maandhan Yojana, a voluntary contributory pension scheme, as a social security measure for unorganised workers.
International Labour Organization: A Snapshot
Established in 1919 under the Treaty of Versailles, ILO initially began as an agency affiliated with the League of Nations. However, in 1946, when the League disbanded, the ILO’s powers and functions were transferred to the United Nations, becoming the first affiliated specialized agency.
The ILO, headquartered in Geneva, Switzerland, received the Nobel Peace Prize in 1969 for its role in promoting decent work, justice for workers, and peace among classes. It has also been instrumental in various pivotal moments such as during the Great Depression of 1929, the decolonization process, the creation of Solidarność – a trade union in Poland, and the fight against apartheid in South Africa.
Its unique tripartite structure brings together governments, employers, and workers from 187 member states to set labour standards, devise policies, and develop programmes aimed at promoting decent work for all.
