Need of hour is support for job seekers and for matching skill needs and talent in the changed scenario

Fund reskilling is important to guide jobseekers towards emerging employment opportunities while helping firms to transition out of support and identify skills and workers they need – and hire them

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Representative image
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Gyan Pathak

Almost a year and half into the crisis, there is still a risk of a rapid build-up of long-term unemployment. At the end of 2020, there were 60 per cent more people unemployed for at least six months. This figure has continued to grow in the first quarter of 2021. Further, the workers who have not regained normal hours face an increasing risk of entering open unemployment.

At the same time, many of those who lost their jobs in the first phase of the pandemic have been jobless since then and may find it increasingly difficult to compete with those whose jobs have been previously sheltered, since many of the job retention schemes are rolled back.

Though people and governments have learnt how to live alongside the COVID-19 virus which enabled many to return to work, the deeply sectoral nature of the crisis and differences in the sheltering offered by various types of jobs have left some to shoulder the bulk of the burden in terms of job losses and reduced working time, the OECD Employment Outlook 2021 has found.

Those in low-paying occupations, often with fixed-term contracts, holding a low level of education, and youth have been particularly affected by the ravages of the crisis. Hours worked by these groups have fallen disproportionately, and joblessness has accounted for a larger share of the adjustment.

Firms are also restructuring in ways that are accelerating pre-existing megatrends, such as automation and digitalization, which will have further implications.

There are over 110 million fewer jobs worldwide, while in OECD countries, there is a reduction of 20 million in availability of jobs, the report said. As vaccination campaigns continue and countries begin loosening COVID-19 restrictions, economic growth is expected to accelerate.

Additionally, many countries are providing unprecedented levels of assistance through job retention schemes and income support, which is helping many households make it through the pandemic. There is thus light seen at the end of the tunnel, but this light burns more brightly for some than others. It reflects the inequality, and it has been deepening.

We know that the COVID-19 pandemic has deepened already existing social and economic divides, between those with high skills and high incomes and those without, between generations, between men and women, between those with good jobs and those with precarious jobs or no jobs at all. Unemployment is high and jobs are not expected to make a rapid recovery. Young, women, lower education levels, and self-employed were particularly affected by the crisis and are still among the most vulnerable.

The first wave of the crisis hit temporary workers disproportionately, while the second wave significantly hit the workers in non-standard employment, whether temporary or self-employed, which has substantial implications for income security and well-being, since they were not protected.

Those who lost their jobs at the start of the pandemic may be worse off still with the labour market remains vulnerable. The full impact of the crisis on the labour market is not yet behind us, and the final extent of net job destruction is likely to depend not only on the length of restrictions but also on expectations and long-term shifts in consumer demand and technology.


The labour market recovery will be slow in most countries. Reaching pre-pandemic employment rates may take several years. Only Australia, Japan, New Zealand, Poland, Germany, Greece, and Korea can hope for returning to the pre-pandemic employment rate by the end of 2021.

Euro area may be able to return to that by the end of 2022, OECD countries, UK and US by 2023, countries like Iceland, Chile, Czeck Republic by the end of 2024, and countries like Iceland, Israel and many others in 2025 and beyond.

Economies are recovering slowly, and therefore, there would be slow rebound in jobs, which in turn will increase the risk of long-term unemployment. Unemployment has dropped since the peak of 2020, but is still higher than in 2019. By May 2021, the unemployment rate as a percentage of the labour force in the OECD countries was as high as 6.6 per cent.

The other distressing phenomenon is that many workers out of jobs are not looking for new ones. The main reason was unavailability of jobs and associated problems in searching for one. Even in OECD countries, 14 million more people over 2019 were neither working nor seeking work. The number of people unemployed between 6 to 12 months have increased by nearing 100 per cent, while for less than 6 months and more than 12 months increased by about 20 per cent each. Social and economic divide has also exacerbated. This situation risks continuing into recovery.

The report suggests rebuilding more resilient and inclusive labour market and addressing long-standing structural issues that have been exacerbated by the COVID-19 crisis. Falling to address inequality and exclusion now is likely to result in deeper social divisions and have a negative impact on productivity and the economic recovery.

In 2021, about 53 per cent of countries have increased support for job seekers and about 52 per cent have increased support for matching skill needs and talent in the changed scenario. It has been recommended for all the countries, since investing in productivity and jobs will help get people back into work.

What should governments do? ‘Invest in productive jobs’ is the first among the top three suggestions. Fund reskilling is important, especially green and digital skills, in order to guide jobseekers towards emerging employment opportunities, while helping firms to transition out of support and identify the skills and workers they need – and hire them.

‘Tailor employment support and training’ to further develop specific measures for the most vulnerable groups (youth, women, the low skilled and some self-employed) to help them reintegrate in the job market.

Ensure adequate social protection and job quality to address gaps in social protection as a priority, in order to extend coverage to workers often left out, and ensure that as new jobs are created, or existing jobs evolve, they are good quality ones.

(IPA Service)

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