As corona virus bites millions of people worldwide lose their jobs sounds are leading to layoffs lots of social and political fallout how will the job market ever recover this is inside story. Hello welcome to the show im sam is a than hundreds of millions of people around the world have lost their jobs as a result of the pandemic but the uns labor agency is warning the Global Outlook could be much worse as current figures exclude workers in the socalled informal economy well that includes migrant and shift laborers in the developing world to freelance and Service Industry stuff taking unprotected jobs in wealthier economies the International LaborOrganization Says 1600000000 of them could suffer massive damage to their livelihoods this means half of the Global Workforce im not sure if jobs will reappear once the crisis is over i have not had any in kong since. They all marched and im just like trying to survive we dont have an income when we were told that. Go home and stay honk we are going to make sure you get your incomes by the air and by dont you find them but thats not happening. Its very important for us because right now were all an employed my son is unemployed the families are unemployed its very important for us to receive reinforcements like food to help us survive. In the u. S. 20000000 jobs were lost in april while 3000000 people filed for Unemployment Benefits in the past week this brings the Unemployment Rate to 14. 7 percent the highest since world war 2 the European Unions jobless rate stood at 6. 6 percent in march a slight drop from the same month last year but the ilo estimates 12000000. 00 full time jobs will be lost by the end of 2020 in china officials this is digs indicate a small increase in unemployment from 5. 9 percent in march to 6 percent in april that excludes a migrant workforce of nearly 300000000 the Economist Intelligence unit says 250000000 of them could see wage cuts of between 10 to 50 percent this year. Lets bring in our guest into the show we have joining us from singapore song sang one director at c i n b Private Banking in geneva Michelle Leighton director of the International Labor organizations Migration Branch and in zurich bruno vers straight chief economist at lakefield partners welcome to wall if i could start with bruno then the i a low says 1600000000 people are in immediate danger of losing their jobs right now what would that do to the world it has scary scenario is it not bruno. It is i think what it would do to the world is clearly to have less attentional for consumption where everyone was hoping to defer it mans will eventually become a real demand again with. A demand never comes back again i think that is the scary thing will not budge europe. Will not spend their money because theres simply a very that they will need to have their savings used to feed their family and that is clearly something which is out of the normal situation and that would have a very long term effect that you cant michel that sort of scenario though the loss of consumption because people are losing jobs they they lose consumption power is a vicious circle is it not because then more people lose their jobs. Well certainly its a key issue for Migrant Workers and we can see that so many Migrant Workers are already in the informal economy where theyre most at risk of these job losses the ilo is estimated it could be 305000000 jobs lost by the end of this quarter now we do expect some of those jobs may come back as economies unlocked and people go back to work but i think boehner is right we dont know to what extent jobs will be lost for good if small and Medium Enterprises which comprise most of the businesses are not able to come back and not able to hire then youre going to have a lot of people out of work and that will affect consumption song were so used to hearing economist give us numbers its just counterintuitive to hear economists say well we dont know do we have any idea how many people are going to end up losing their jobs before this pandemic in a civil system oh were going to be shelves plain release it will be a case of how long does a lockdown although we have seen countries lifting recession perhaps a fear of will soon will persist fall little while longer so as long as theres no restriction the within the country a lawyer. Or a lot more harder and harder to do who is in the countrys restriction borders etc will take a while to be remote which is why when we look at the. In terms of what the projection for global basically passenger truck traffic there see if we are looking at the 6 months containment even so all traffic may only be one passion and probably only to another couple more years before we get back to the precrisis levels so all that basically will have Significant Impact on the Business Front on the labor market front and the whole overall consumption front so hes a pretty dire picture on my. Really obviously depend on help these im soul that die a picture with lots of restrictions of movements of people because of lockdowns michel often the hurts the least privileged sex or of the labor market the informal workers and Migrant Workers that you were talking about right well thats right thats right they are feeling now the most acute impacts and they are likely to feel those impacts for a lot longer and much more significantly than the workforce thats in the formal economy end and Migrant Workers are so certainly a group of key concern we know for example that 75 percent of women and quite a number of countries they surveyed are in the informal economy but theyre also doing jobs on the front lines like in health care and Health Care Services so we dont know the impact that that will have but we know that there are already not receiving in many cases access to emergency economic or wage supports as nationals are theyre not receiving perhaps access to social protection theyve already been in situations where theyre receiving low wages many have lost their jobs are trapped not able to take up employment that they had contracts for so theyre at home with live without a job or theyre in destination countries and situations where they may be paying be paid less or not at all for the work theyre doing so theyre certainly much more impacted very disturbing ultimately bruno are we talking about the necessity of a completely restructuring of the entire World Economy before were able to deal with the fallout of covert 19. Well i think the coven crisis is like a tunnel just dont know that we know that it will end we just dont know how long it will be looking into it and we dont know the longer dont know the darker it is in the middle and d alter it turns into the middle depending on how long this crisis last the more Collateral Damage there will be one important aspect of this is that the Service Industry is affected much more at much deeper than the Production Industry because the deferred demand in services you cannot go back to a restaurant yesterday when it was closed that over is gone and i think that makes the Service Workers much more effective in that respect and that will have long term Collateral Damage so to say we will restructured the economy clearly will try to differently we will work differently romel has will become more of a regarding and all that i think will restructure itself without us doing it by their own it will be said by her and because of that it will be you mentioned earlier that you know not all jobs may recover do we have any idea of what percentage of permanent job loss so were looking at. Its very difficult but if we just take the door is an industry which is about 12 percent of g. D. P. In europe and we just look back at what good will to actually happen in 2020 lets say that to do 1st moms who are 10 percent of g. D. P. Will be lost interest in the worst potential case that will have a huge damage to airlines and recovering so only that industry if we zoom into one of the most active industries because of the crisis will have a long term too to recover before we go back to the normal and werent in iran for example i think we could go back there or all the way up to 2022 and my done a lot of parents might go. And have permanent damage to their record were hearing song numbers like that 202220234 different sectors of the economy now that were still not sure i mean that theres talk about it will there be a 2nd wave will there be even a 3rd or 4th fall beyond wife do we have any idea how long recovery will take. Your guess is as good as mine i suppose at this point really is no no we look we want you to have all the answers song we want you to bring out my crystal ball whole. Vary by weight this point you in the eye of the best brain Union Medical or bank a. D. B. Davies we just say that this is our up assumption of where the true path perhaps is but you have such a huge so a range of uncertainties around it i mean coming back to the point of travel in hospital with these we really dont know when governments are comfortable enough to allow people to travel you know and we were just talking on the cell in terms of where you singapore while we have restriction so if part of restrictions are that when we walk back to the office you will not be everybody going back it will just be a fraction of that because social distancing still requires people to be separate to see in the office lives so he sings goes on and on hospitality travel big chunk in many parts of asia when youre talking about sea. Thailand pinang in the lazy we dont know when theyll recover so the multiplier of those drag will continue to pursue strike because its the Services Sector may continue to drive even though supply chain may be looking to recover now but obviously that demand side is going to be a big question is that stick to Auto Industry for instance on the cost yes people are returning to the factories to make cars again but how many cars do you really need to make so all these things remain a drag i think across the broad sweep opportunities except perhaps in the new Digital Space where its the Digital Economy ecommerce internet thats driving a lot of roles and opportunity but thats a very small slow. Well not that of the slack in that mine elsewhere talk about offsetting the slack in demand if we go back to bruno weve seen governments in some wealthier countries either send checks in the post directly to people. All try and pick up the wages bill by providing support to companies thats what theyve been doing in europe but how long can governments go on picking up the slack in that way bruno. Well i think we all know that some countries already have very high level of Government Debt the good news about this one is that its. So theres no questions asked about spending and filling the gap in between the beginning of the done well and the end of that whether it is on the revenue gap for companies or d. Income gap for employees i think that gap theres a clear you know your numbers and the all around the world to fill and gap now the question and that will be the long term problem is how much debt damage is done and it needs to be a bat. In order to accommodate and philip that can clearly italy for example has a bigger issue that splits and europe focuses on the employment on filling out an income the u. S. Is more focused on providing. Compensation in a way for all revenues and of course that will that outcome is a difference in a difference of overseas but clearly its a price to be big needs wrong and that we did countries well evil weaker stronger countries might be relatively speaking be coming out of this wrong its a very important point i want to to go to song in a moment for more on that but the debt problem but before we do that if i could ask michelle while were talking about you know the formal work has in some countries are getting checks and theyre getting support from governments what about the informal economy and you know the migrant labor force are there any initiatives to support them anyway. Well its a good question certainly theyre often left out of the formal economy and and access to the kinds of economic supports and Services Including social protection that other workers in the formal economy have access to so theyre not really the ones getting the checks and having that kind of support which pushes them further behind and makes them even more precarious as we try to emerge from this crisis but there are indeed a number of countries who have extended some emergency Economic Relief and support chill a new zealand tunisia and in fact some have asked their business communities to step up and help support Migrant Workers and and those who are in the country who can for those who are most vulnerable or even california at a state level how do you see any Success Stories michel that the you could share with us that the world needs to look at well i mean we see for instance the philippines has initiated a fund to help migrants abroad who are in in situations of vulnerability and that certainly is something that we would encourage and for for the economic supports that are being mobilized regardless of the region they should be considering how to be inclusive of those in the informal economy and those Migrant Workers and we know there most of them are women Migrant Workers who frankly could be able to contribute more to the workforce and keeping a strong labor force will require being inclusive and making sure those economic support systems as well the social support systems are equitable right song bruno mentioned the debt problem the governments are going to be left with after this is over how how governments going to do with especially those which went into this already struggling with huge debts. If you look back last 10 years low Interest Rate cheap to borrow or so recently have been see gunmen copper its doing that sort and then last year you know i. M. F. Or bank obviously highlighting the risks of that huge pile of debt you know at the late stage of a mature girl cycle were all just debating what would trigger a recession there was a. Creep by turns out to be a little iris one thing i suppose that is going to be helpful at this time from the debt side it doesnt look like Interest Rates went up or anywhere except down and a lot for a period of time so all those debt Interest Payment will well if thats any consolation not going to be overwhelmingly large but obviously this is something that to help fund the governments of the centuries in private consumption consumption is going to be continued to be depressed the government stepped up to help some push to question some of the impact of these new to going to replace that but they will just have to do so in this kind of environment where private sector continence remains very very jolly at this point thats precisely one of the problems here bruno is confidence is very fragile is there anything more governments can do to step in and restore consumption confidence that can in turn spur investment confidence so companies go out and reestablish production chains and hire people. Well i think a good home for relation that inflation i think the result of looking absolutely supply fragility that weve seen in this crisis to bring the employment closer vote and i think that is the desire of some of the governments out there which makes both lives more expensive the fact that there will be for example less airlines will make the prices go up so that would end the wait sure the event road to a certain extent of asian which was almost absent over the last period of the planet might come back and that it would be helpful to the government i dont fully agree with the fact that just vote simply for the fact that the offer of outstanding is going to go up a lot that demand. Change even go down because theres less money available to save and i searched the interest will go up because everyone is competing for the same best so Interest Rates might go up might make the issue into a bigger issue rachel its not systemic yet but it could turn into something systemic quite early on so that inflation is based on what he governs should hope for and growth to come back michel we should also perhaps remember that while were talking about work is in some countries getting checks in the post or getting support in paying for companies to pay their wages thats not what thats not all the countries in the world that are doing that right so whats happening even to the formal work is in less wealthier countries and economies. Well theyre being left behind and theyre being left out and theyre being you know more and more in precarious situations and certainly its concerning we see Food Insecurity further discrimination and xenophobia on the rise and many people are really struggling but to get back to one of the points raised before you know how do we see merging from this this crisis i think policy matters too its just its not about just economic supports it also means that we have to take this opportunity to build back stronger and that will require really examining our governance strategies and our governments policies to really include those people who are being left behind you know they bring lots of talent and skills to the to the workforce but their skills and talents arent necessarily recognized we think that for instance if you can create policies which have much more coherence for example migration policies with education and training and employment policies it means youre going to look at issues like Skills Development not just of the National Workforce but of your migrant workforce looking at social protection extension and the portability of Social Security entitlements and examining how rights can really be protected in a fair and effective framework we have the opportunity now to do that and thats the opportunity we should take by looking to the mid and longer term do we have the money to do that is probably what governments would. Well its going to take a concerted effort by all and certainly we advocate social dialogue which means bringing in business bringing in the trade unions bringing in all of the relevant stakeholders the ministries of labor and so on to really tackle this issue but we have faced crisis before and we can emerge right there should be exists already though also in the design of these policies and that will make them more durable song i wonder if you could share some light shed some light i should say on one interesting aspect of this this pandemic of course began in one han in china and now the the recent statistics talk about only a slight uptick in unemployment and even in some in some cases some of the Economic Indicators i think it was exports some sectors of exports looking positive for china how. What i suppose again is theyre talking well a china being an important Production Supply chain if we are just here in singapore for instance if by going down to our super market plenty of our problem the chinese say well look at many factory stuff quite a lot of stuff from china either is in the media of final words as well so i would say the rebound after these february lockdown really just was all about. Supply chain i suppose recovering somewhat is still not i think back to what did used to be certainly what we are or likely to be we saw in in 2 days at least at the 6 from the a pro side a recovery on Industrial Production side i mean thats the if theres anything a good thing from a sense that we centrally planned economy that they essentially. Businesses to do or say or hands of the pump because supply needs to work orders need to be for real and this might just be temporary in terms of the pick up more importantly israel where the consumption within china itself has recovered it hasnt if we look at retail sales from since is still very weak the again it comes back to the confidence issues are you going to be spending an environment where you still are not quite sure where theres going to be thinking where you were and so theres still a bit of restraint on taxes on the spending side so hes going to be still very mix i think coming out from china to be able to stabilize the region or the rest of the law very makes very unpredictable but thanks so much to our guests for sharing their insights into this important topic thank you very much michel bruno and song. 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