As a continuation of COVID-19 consequences analysis and in order to help businesses in their 2021 budgeting efforts My Best CFO Team shares insights from International Labor Organization regarding year-to-date Q1, Q2, Q3 2020 and projection for Q4 2020.
During the first quarter of 2020, an estimated 5.6 per cent of global working hours were lost relative to the fourth quarter of 2019, equivalent to 160 million full-time jobs (assuming a 48-hour working week). Given the earlier spread of the virus in China (which implemented strict containment measures already in late January) and other countries in Asia and the Pacific, it is not surprising that this region accounted for approximately 80 per cent of the global reduction in working hours during the first quarter of the year.
Data Source: ILO
The impact of the crisis has proved to be much greater than previously estimated, particularly in developing countries. The estimated decline in global working hours in the second quarter of 2020 is 17.3 per cent relative to the fourth quarter of 2019, which is equivalent to 495 million full-time jobs (assuming a 48-hour working week)
Data Source: ILO
Decline in global working hours of 12.1 per cent in the third quarter of 2020, is equivalent to 345 million full-time jobs (assuming a 48-hour working week), relative to the pre-crisis baseline (fourth quarter of 2019). Although it is an improvement on the global working-hour losses compared to 17.3 per cent estimated for the second quarter, this still represents a considerable decline, suggesting that full job recovery continues to be hampered by the persisting public health and economic challenges posed by the COVID-19 crisis.
Data Source: ILO
Projections for the fourth quarter of 2020
Under the baseline scenario, global working-hour losses are expected to amount to 8.6 per cent in the fourth quarter of 2020, equivalent to 245 million full-time jobs. Considerable variations between regions are likely to persist. Under the baseline scenario, working hour losses are projected to be 14.9 per cent in the Americas in the fourth quarter Americas in the fourth quarter, while losses could fall to 7.3 per cent in Asia and the Pacific. In all regions, working hours will remain far below the levels seen in the fourth quarter of 2019, indicating that the severe job crisis is likely to continue well into 2021.
In the pessimistic scenario, global working-hour losses in the fourth quarter of 2020 are projected to reach 18.0 per cent, equivalent to 515 million full-time jobs. Under the optimistic scenario, working-hour losses would still amount to 5.7 per cent in the fourth quarter, or 160 million FTE jobs.
Data Source: ILO
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