The crisis created by Covid-19 has heavily impacted the economic and labour market, impacting not only supply, such as the production of goods and services, but also demand, such as consumptions. Disruptions to production, which initiated in Asia, have spread to supply chains across the world. And now, 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.
ILO cited that Covid-19 will and might already have far-reaching impacts on labour market outcomes. Beyond the urgent concerns about the health of workers and their families, the virus and the subsequent economic shocks will impact the world of work across three key dimensions: 1) The number of jobs (both unemployment and underemployment); 2) The quality of work (e.g. wages and access to social protection); and 3) Effects on specific groups who are more vulnerable to adverse labour market outcomes.
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Unemployment and underemployment are expected to increase on a large scale, with temporary dismissal and reduced work hours already in practice. ILO data showed that there is approximately an increase of 13 million unemployment in 2019. Additionally, the shock to labour demand is likely to translate into significant downward adjustments to wages and working hours. While self-employment does not typically react to economic downturns, it acts as a “default” option for survival or maintaining income – often in the informal economy. For this reason, informal employment tends to increase during crises.
Meanwhile, Willis Towers Watson survey showed that companies are increasing their budget to safeguard employees as immediately as possible. In China, 92 percent of survey respondents said that they provided free protective equipment such as medical masks and antibacterial products. Singapore was slower to adapt with only 37 percent said they had done so by mid-February, compared with two-thirds in Taiwan.
In terms of wages, Singapore employers cited that they will implement salary reductions up to 18 percent, much higher compared to only 2 percent of salary reduction in Hong Kong businesses. For the hourly employees, the survey found that 72 percent of companies are most likely to continue to pay their workers even when they are Covid-19 positive, while more than half of respondents will continue to do so if the employee’s work location undergoes a mandated lockdown.
Regarding the future of work, Jeanne Meister, Founding Partner of Future Workplace, wrote that the future of work is consumed by the impending disruption of jobs, automation, and changing workforce demographics. All of these are also accompanied by the need to make worker wellbeing a priority. Employees’ wellbeing, added Meister, has always been part of an employer’s strategic business due to the rise of “always-on” culture and now, it has become more important. Employers are now required to assist workers to deal with their stress in managing work-life integration as well as anxiety in the midst of coronavirus.