ILO stresses need for structural changes to address growing poverty, inequality

The Covid-19 crisis has exposed deep-rooted inequalities and without profound structural changes these will merely intensify – with consequences that will be very difficult to predict, said Guy Ryder, director-general of International Labour Organization (ILO).

As labour markets around the world continue to reel from the crisis, Guy Ryder has called for sustained social spending as well as structural changes to counter the dangers of growing poverty, joblessness and inequality, read an ILO press release.

In statements submitted to the Annual Meetings of the International Monetary Fund and the World Bank Group, he outlined the harsh impact of Covid-19 on many of the two billion workers in informal employment, as well as on those with little protection such as temporary, domestic or migrant workers.

"Filling the stimulus gap in emerging and developing countries requires greater international solidarity while improving the effectiveness of stimulus measures. The poorest countries should not be forced to choose between honouring their debt obligations and protecting their people," said Ryder.

He called for post Covid-19 policy frameworks to be consistent with the principles set out in international human rights instruments and social security standards.

"Today this is particularly relevant in order for fiscal policies to underpin much-needed investments in universal social protection systems," said Ryder.

Most states have mobilised their social protection systems. However, many of the adopted measures have been temporary and often insufficient to offset the steep decline in incomes during this protracted crisis.

Many countries have adopted large scale fiscal packages in response to the crisis, particularly to support incomes and businesses.

However, the ILO has found that fiscal stimulus has been unevenly distributed worldwide when compared to the scale of labour market disruptions. Nearly nine-tenths of the global fiscal response to the crisis has been in advanced countries.

The ILO director-general also warned against the profound and lasting effects of the Covid-19 crisis on the world economy and living conditions, in the context of global transformations already underway, driven by: automation, geopolitics, ageing, migration and climate change.

"A combination of crisis-related and structural pressures could create a perfect storm of challenges for employment, household income and other aspects of human security in many countries over the next decade. These are the ultimate determinants of consumer and investor confidence, aggregate demand and economic growth and development," Ryder said.

"The world economy needs to find a new, or at least supplemental, engine of economic recovery," he said. He referred to the fundamental building blocks of economic and social progress: widely available employment for all, skilling opportunities, decent working conditions, sustainable enterprises, adequate social protection and increased gender equality – with all of the contributions to productivity growth, purchasing power as well as consumer and investor confidence these bring.

"An extraordinary collective effort – built on social dialogue and focusing more directly on strengthening these cornerstones of national economic strength and social cohesion – will be required if the world is to achieve its stated ambition of building back better, and faster, from the crisis," he concluded.