COVID-19 • ILO records massive labour income losses worldwide • TUC and economist suggest further work on the impact of COVID

A new International Labour Organisation (ILO) analysis of the labour market impact of COVID-19 has revealed a massive drop in labour income.

It states that the devastating losses in working hours caused by the COVID-19 pandemic have brought a massive drop in labour income for workers around the world.

In Ghana, a business tracker survey, conducted by the Ghana Statistical Service (GSS) and the United Nations Development Program (UNDP) and released in March, discovered that at least 42,000 workers had lost their jobs as a result of the outbreak of the novel coronavirus in Ghana since March.

It said about 770,000 workers, representing 25.7 per cent of the total workforce in the country, had their wages reduced during the partial lockdown in April to combat COVID-19, leading to a reduction in working hours.

Ghana incomes

In an interview on September 25, 2020, the Director of Labour Research and Policy Institute at the Ghana Trades Union Congress (TUC), Dr Kwabena Nyarko Otoo noted that the reduction in income by employers as part of the mitigation measures to fight COVID-19 rather than dismissing workers seemed to be the most dominant response of employers in Ghana to the pandemic.

This, he said, tied in with the ILO’s report about a decline in workers share of income globally.  

He deduced that various research sought to suggest that in terms of job loses, it was not that massive and also seem to suggest that Ghana is crawling back following the easing of the restrictions.  

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However, he said challenges remained, citing all the teachers in private schools that have been home since March/April, majority of whom are not being paid.  

“We have about 26,000 private schools officially registered at the pre-tertiary level in Ghana and some 6000 unregistered. If you take the 26,000 and assume each will have a workforce of 10 teachers plus non-teaching staff, and since March all these people are at home.

“So sometimes, it is surprising how people want to underestimate the impact of COVID on employment. For most of these people it is not very likely that they are being paid- probably they were expecting to go back in the last quarter.

“If the half salary has ceased by now and they are now certain that the schools will not open until next year, how do you expect employers to keep these people and continue to pay them,” he quizzed.  

He added that “So, probably we need to come to a consensus and do further work on the impact.”

Dr Otoo said jobs in hotels were massively affected because they relied a lot on conferences and workshops most of which could be internationally funded.

“It will be hard to think that people are traveling now for conferences. If there is a Ghanaian who is working outside or who got stranded during the lockdown, you can expect them to come back.  

“But foreigners who normally come to attend conferences, patronise the restaurants and hotels, to think that they will be coming here at this time is still farfetched,” he said.

Economist’s view

The Dean of the Business School at the University of Cape Coast (UCC), Prof. John Gatsi, explained that the impact on labour and income was in two folds: negative and positive.

He said Ghana had gradually accepted teleworking (working outside the mainstream work environment) and has identified that the need for the safety of its workers which has been accepted by a lot of managers and labour experts.

He said COVID-19 had created room for internal creativity and innovation as in many workplaces, where workers have devised their own means of working now.

On the negative aspect, he noted that income and jobs have been lost and also redeployment some of which has not been in the interest of the worker.

“'In some places, because of low productivity and income generation, they had to cut down income and wages of workers. That has resulted in a drop in incomes for workers and that's where the hardship emanates from,'' he said.

Prof. Gatsi said it had also brought about some displacement, especially women because they had to gradually adjust to settings of the new workplace environment, bringing about inequality because if one is not able to cope then she has to drop.  

Touching on the GSS survey, he said those are the immediate responses the GSS received.

However, the lockdown and its restrictions that were imposed affected businesses in a manner that can be described as having a period of having pass through effect.

“Some of the effect could be felt after the survey was conducted so it will not be enough to look at the figure that was churned out and begin to draw policy,” he said.

He said the signals are clear that job losses have been recorded, lower income has been identified because of allowances taken away and salaries slashed-   increase the level of poverty.

Lessons learned

Prof. Gatsi noted that COVID-19 had taught Ghana the need to ensure that it takes comparative advantage for its nation building.

For the management of institutions, he said Ghana needed to pay attention to innovation, creativity and proper adoption of virtual technologies for its activities.

“'These lessons should be integrated into our policy framework at the national, institutional and corporate level. 'Ensuring that expenditure is directed to the most important things should help us to shape our policy,” he added.  

On March 30, 2020, the Minister of Finance, Mr Ken Ofori-Atta, delivered a statement to Parliament on the “Economic Impact of the COVID-19 pandemic on the Economy of Ghana, where he painted an unpleasant picture of the impact of the pandemic.

He said there was likely to be a significant slowdown in the GDP growth, significant shortfalls in petroleum revenues, shortfalls in import duties, shortfalls in other tax revenues, increased health expenditures and tighter financing conditions with consequences on the 2020 budget.

The ILO’s report

In the ILO’s latest assessment of the effects of the pandemic on the world of work, global labour income is estimated to have declined by 10.7 per cent or US$ 3.5 trillion in the first three quarters of 2020, compared with the same period in 2019.

This figure excludes income support provided through government measures.