Inequalities exposed
G7 Summit

Inequalities exposed

Optimistic growth figures have long obscured the deep disparities that exist within our societies – and which have been laid bare by the COVID-19 crisis. Guy Ryder, director general, International Labour Organization, calls for long-term change to build an economic and social system with humans at its heart

The deep social and economic crisis resulting from the measures taken to fight the COVID-19 pandemic is exacerbating pre-existing decent-work deficits and inequalities. It exposes the deep-rooted, structural inequalities that have been growing, often obscured by optimistic economic growth figures, over the past decades.

Young people, gig workers, the self-employed, migrants, micro and small enterprises, and all those in the informal economy or in non-standard forms of employment, many of whom are women, are deeply affected by the economic crisis. In Italy, for example, 59% of employed women work in the four sectors that have seen the sharpest economic contractions during the pandemic, including retail trade, business and other services, manufacturing, and accommodation and food services. In many countries, affected workers may not be covered by unemployment insurance or other critical protections, such as paid sick leave or sickness benefits.

Plight of the young

Young people are particularly hard hit by the economic fallout of the crisis. Making the transition into decent employment was already a tough challenge for young people in the best economic times. In 2019, before the virus outbreak, 9.4 million of those aged under 25 in G7 countries were not in employment, education or training. Now it is worse. In Canada, for example, employment among youth aged 15 to 24 decreased by more than 17% between February and July 2020 and brought the employment rate for youth to 47%, the lowest on record since comparable data has been available. Attempting to enter the labour market in a recession can lead to significant and persistent scarring effects for young people that can last their entire career, meaning that the legacy of the COVID-19 outbreak could last for decades.

The pandemic is also having devastating social and economic consequences for women and girls. Nearly 60% of women in the world work in the informal economy, where they earn less, save less and are at greater risk of falling into poverty. As enterprises close, millions of women’s jobs have disappeared. In the United States, young female workers accounted for the strongest increase in unemployment in the first half of 2020. At the same time as they are losing paid employment, women’s unpaid care work has increased exponentially as a result of school closures and the increased needs of older people. Measures to protect and stimulate the economy, from cash transfers to credits and loans, must be targeted at women.

The need for stimulus measures

All G7 members have launched historically unprecedented fiscal stimulus measures and invested in health, social protection and support to enterprises for business continuity. These have so far played an important role in keeping workers on payrolls through various employment retention schemes, preventing bankruptcies of millions of small and medium-sized enterprises, helping deal with unforeseen care needs, and providing income support to sick workers and their families, to people losing their jobs or self-employment income, and to quarantined workers who cannot work from home.

The damage inflicted by the crisis on labour markets and the difficult global economic conditions that continue to prevail, indicate that such supportive policies will need to be maintained to sustain recovery. Premature fiscal consolidation, as followed the financial crisis of 2008–09, would risk destabilising already weak labour markets.

Furthermore, without long-term changes, the deep-rooted layers of social injustice and inequality will remain. We need to rebuild our social and economic systems in a way that will leave us better prepared for future crises, but also bring us closer to the vision of social justice, equality and sustainability that the International Labour Organization stands for. The ILO Centenary Declaration for the Future of Work provides a roadmap to build back better. It focuses on increasing investment in people’s capabilities, in the institutions of work, and in decent and sustainable work to foster a human-centred economic and social system.

G7 leaders have shown their determination in addressing the short-term effects of the COVID-19 pandemic on our societies and economies. They now must show the same level of determination and solidarity, and mobilise collectively for lasting, transformative and sustainable development, at the same time as they tackle the planet’s climate emergency. Strong social dialogue, collective action, respect for human rights and fundamental principles and rights at work, provision of universal social protection, and renewed commitment to international solidarity and multilateralism will be essential to achieve lasting social justice, equality and sustainability.