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A policy framework for tackling the economic and social impact of the COVID-19 crisis

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In June 2019, the International Labour Organization’s (ILO’s) 187 member States adopted the ILO Centenary Declaration for the Future of Work,1 calling on the Organization to pursue “with unrelenting vigour its constitutional mandate for social justice by further developing its human-centred approach to the future of work, which puts workers’ rights and the needs, aspirations and rights of all people at the heart of economic, social and environmental policies”. Less than a year later, the coronavirus disease 2019 (COVID-19) has plunged the world into a crisis of unprecedented scope and scale that has made the imperatives set out in the Centenary Declaration even more urgent as the international community engages in a collective endeavour to tackle the devastating human impact of the pandemic.

This crisis has a human face and, as such, it calls for a human-centred response. In this policy brief the ILO offers comprehensive and integrated recommendations on the key areas of policy action that should form part of that response. The brief is addressed at ILO constituents (governments, employers and workers), policy-makers and the general public.

While restoring global health remains the uppermost priority, it cannot be denied that the strict measures required have caused massive economic and social shocks. With the prolongation of lockdown, quarantine, physical distancing and other isolation measures to suppress transmission of the virus, the global economy is sliding into a recession. As supply chains disintegrate, whole sectors collapse and enterprises close, more and more workers face the prospect of unemployment and loss of their incomes and livelihoods, while many micro- and small enterprises are on the verge of bankruptcy. All too often, regardless of where they live, workers and their families lack income support and social protection to keep them from falling into poverty. Developing economies, which already have high levels of working poverty and weak or absent social infrastructure and services, face uniquely pressing challenges in fighting the pandemic.

Countries around the world have introduced a first round of stimulus packages to rescue their economies and support their citizens. The specific policies chosen by countries will determine in what shape their economies and societies will ultimately emerge from this crisis. A number of key considerations must be taken into account.

First, only by balancing support for enterprises, on the one hand, with support for workers and their families, on the other, will governments be able to address properly the crisis’ human dimension.

Governments must tailor their support packages so as to save businesses and jobs, prevent layoffs, protect incomes and leave no one behind. It is necessary to focus on all those who work – including the self-employed, own-account workers and “gig workers” – whether in the formal or informal economy, whether paid or unpaid, and of course also on those who have no way of supporting themselves.

Second, the urgency of the crisis and the immediate need for action must not serve as a pretext for jettisoning the normative framework. International labour standards, together with the Decent Work Agenda and the 2030 Agenda for Sustainable Development, provide a strong basis for efforts at the national level to “build back better”. These international instruments form an integral part of a broader human rights agenda for recovery.

Third, social dialogue must remain at the heart of policy-making during the crisis. This will help anchor labour market policies in the normative framework, ensure the prompt implementation of measures, strengthen social inclusion and foster a sense of common purpose. The experience of the Great Recession of the late 2000s and of other crises has proved the value of social dialogue in designing effective solutions. In the present crisis, where isolation is the order of the day, the use of technology and other innovative measures can keep governments and the social partners (i.e. employers’ and workers’ representatives) connected, as indeed many countries have already discovered.

Lastly, we cannot recover without global solidarity. International organizations, including the international financial institutions, play a key role in providing support – financial and otherwise – and it is important to ensure that they communicate coherent messages. Advanced economies must not only attend to the needs of their own populations but also assist countries that cannot achieve recovery on their own. The strength of the international community depends on not leaving its most vulnerable members in the lurch.