Covid-19 and the Labour Market

Coronavirus is not only a crisis of the present. Unfortunately, it is also a crisis for our near future, and maybe not-so-near future, and its damages are already being felt.

Public health systems and other public services and administrative bodies in several Member States are reaching (or have already reached) a breaking point, and millions of jobs and businesses are already being affected around the world.

The labour markets are being profoundly hit by this invisible threat, while the public services are also reaching the limits of their capacities, and alleviating actions are of utmost urgency.

The International Labour Organisation (ILO) has already released preliminary assessments on the first effects of the coronavirus on the labour markets and the daunting scenarios of what is yet to come. ILO preliminary estimates see a growth in unemployment between 5.3 million jobs (low scenario) to 24.7 million (high scenario)[1], which would also translate in a GDP growth drop between 2% and 8% respectively[2].

The sectors most affected are the services sector, tourism, travel and retail[3]. Furthermore, certain groups of workers are more vulnerable to economic shocks, needing more targeted policy measures for their protection.

These groups are people with underlying health conditions; young and old workers, precarious workers and/or in atypical contracts (such as solo self-employed and workers in the gig economy, as well as seasonal workers), migrant workers and women[4].

Women are particularly vulnerable during this crisis, since they are mainly overrepresented in caregiving professions, such as health workers (nurses), social workers and teachers[5]. Furthermore, women represent most of the caregivers in our society (for example elderly people, disabled people or children), which is mostly unpaid and increases the gender pay gap[6].

Against this background, the ILO determines three dimensions of impacts of COVID-19: the quantity of jobs, the quality of jobs and the effects on specific vulnerable groups[7]. This implies consequences for the rates of unemployment and underemployment[8]; wages and access to social security protection; and increasing social exclusion and working poverty.

In order to tackle this crisis and minimise its impacts, policy responses need to be taken immediately. In this light, a coordinated, large-scaled and integrated COVID-19 response by the European Union and its member-states is fundamental to overcome this crisis. This will not only need to translate in more robust health systems for the future, but also in mitigating the consequences for the labour market, especially for the groups who are most at disadvantage.

Many states have quickly adopted massive economic stabilisation packages to financially protect and ensure monetary liquidity for all those affected. This will be vital to prevent or at least mitigate larger-scale economic downturn, rising unemployment and financial problems of households and families. CESI welcomes the announced additional flexibility on state aid and (overdue) flexibility for governments within the Stability and Growth Pact (SGP).

The EU and the Member States need to ensure financial and income support for those employees and workers who are hit by unemployment, short work or a temporary reduction of work. Importantly, support must also be given to the solo self-employed and those in atypical or new forms of employment.

National trade unions are encouraged to engage into dialogue with employers and governments on how to protect jobs and incomes. Employers should give employees the necessary flexibility to manage work and home office with domestic responsibilities such as child and elderly care. Special attention should be given to women who bear up to most care work.

The crisis also shows that in the future considerable investments will be needed to bring the resilience of health systems to a higher level. This concerns equipment, facilities, staff levels and employment conditions. Re-communalisation of any privatised core health services should hence be increasingly considered in the future.

CESI acknowledges the tremendous efforts which have been undertaken since the beginning or the crisis, but crisis preparedness and management will have to be further improved. A stronger role, more financial resources and enhanced capacities for the EU will be necessary.

Coronavirus is a word that will surround us for the next months, possibly years. Its consequences will continuously be felt for the near future. However, with a solid, cohesive and cooperative response, we can overcome this crisis, without leaving anyone behind. CESI has been underlining for many years, that expenditures in public services are not merely costs, but that they are investments in the future.

Guide for further reading:

International Labour Organisation, 2019: Guidelines on decent work in public emergency services

International Labour Organisation, 2020 18 March: COVID-19 and world of work: Impacts and responses

World Economic Forum, 2020: How Governments can soften the economic blow of coronavirus,

World Economic Forum, 2020: The coronavirus fallout may be worse for women than men. Here’s why,

[1] International Labour Organisation, 2020 18 March: COVID-19 and world of work: Impacts and responses, p. 3

[2] Ibidem, p. 13

[3] Ibidem, p. 4

[4] Ibidem, p. 6

[5] World Economic Forum, 2020: The coronavirus fallout may be worse for women than men. Here’s why,

[6] Ibidem

[7] International Labour Organisation, 2020 18 March: COVID-19 and world of work: Impacts and responses, p. 3

[8] Underemployment is related to informal types of employment, which are less socially protected, and tend to increase during economic crisis.