Infection or starvation: A dilemma facing 2bn informal workers worldwide

Lockdown measures will worsen poverty and vulnerabilities among the 2 billion informal economy workers worldwide, according to a paper released on May 7 by the International Labour Organization (ILO).

The paper, titled "Covid-19 crisis and the informal economy: Immediate responses and policy challenges," suggests that lockdown and containment measures threaten to increase relative poverty levels by as much as 56 percentage points in low-income countries.

In high-income countries, relative poverty levels among informal workers is estimated to increase by 52 percentage points, while in upper-middle-income countries, the increase is estimated to be 21 percentage points.

As of April 2020, it was estimated that almost 1.6 billion workers in the informal economy had been affected by the Covid-19 pandemic, leading to an estimated 60 percent decline in their earnings, the paper adds.

"The Covid-19 crisis is exacerbating already existing vulnerabilities and inequalities," said Philippe Marcadent, chief of the ILO Inclusive Labour Markets, Labour Relations and Working Conditions Branch.

"Policy responses must ensure that support reaches the workers and enterprises who need it the most," he added.

Countries need to follow a multi-track strategy that combines several lines of actions relating to both the health and economic impacts of the pandemic, the ILO paper recommends.

Among its recommendations, the report highlights the need for policies that reduce the exposure of informal workers to the virus; ensuring that those infected have access to health care; providing income and food support to individuals and their families; and preventing damage to the economic fabric of countries.