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Economy

Global employment will not recover until 2023, ILO warns

Asia's supply chain reorganization presents risks and opportunities

Unemployed men queue in Dubai for food handouts after losing their jobs last year during the COVID-19 pandemic.    © Reuters

TOKYO -- The International Labor Organization warned on Wednesday that jobs lost in the heat of the COVID-19 crisis will not be recovered until 2023, at the earliest.

The pandemic, which caused a shortfall of 144 million available jobs in 2020, will have aftershocks in the global labor market.

In a new report released on Wednesday, the ILO estimated that the jobs gap will fall to 75 million this year, and 23 million in 2022. Even so, over 200 million are expected to remain unemployed next year, compared to the pre-pandemic count of 187 million in 2019.

Asia will not return to pre-pandemic levels in 2022 despite enjoying the world's highest labor force participation and employment rates in the decade before the crisis.

Regional unemployment is projected at 5.0% in 2021, improving by 0.2 percentage points from 2020. The ILO forecasts unemployment in Asia will fall to 4.7% in 2022, which would still be above the 2019 level of 4.4%.

South Asia will continue to be the hardest hit this year, with unemployment falling to only 6.1% from 6.8% in 2020 -- the largest loss in Asia.

Although things are looking up for the second half of 2021, with an estimated 100 million jobs by year's end, the ILO warned of long-term economic scarring as businesses close and worker skills atrophy. Uneven vaccine coverage and the resurgence of COVID-19 in some regions could compound an "unequal and fragile" recovery.

For Asia's developing and emerging economies, "the quality of newly created jobs is likely to deteriorate in those countries," said the ILO.

The recovery of manufacturing is expected to boost Asian jobs in 2021, as the sector accounted for 30% of job losses in 2020. The ILO continued to warn of losses in women's employment, as women are dominant in many of the hardest-hit industries.

The jobs outlook bodes even worse for young people entering the labor market, as the decrease in available jobs forces them to miss out on training opportunities. Among youth, the ILO observed "a severe discouragement effect," and many stopped searching for jobs in the past year.

"Without a deliberate effort to accelerate the creation of decent jobs, and support the most vulnerable members of society and the recovery of the hardest-hit economic sectors, the lingering effects of the pandemic could be with us for years in the form of lost human and economic potential and higher poverty and inequality," said Guy Ryder, the ILO's director-general.

A protracted jobs recovery in Southeast Asia will be partly due to an influx of migrant workers, forced to return home by the pandemic. Over 600,000 were repatriated by India and 230,000 returned to the Philippines, where the economy depends significantly on remittances from migrant workers, according to the ILO.

In Asia, the poverty rate increased by 3.9 percentage points, or an additional 65 million workers.

"Five years of progress towards the eradication of working poverty have been undone," the ILO said. The number of workers living in poverty, or less than $3.20 per person per day, rose by 108 million last year.

Post-crisis, the reconfiguration of supply chains presents opportunities and risks for regional employment, as governments seek to protect critical industries and diversify suppliers.

The ILO called on Asia to view the crisis as "a wakeup call regarding the need to diversify their economies away from an overreliance on export-led growth."

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