Workers in food and accommodation, and wholesale and retail trade, are the hardest hit for having the least “teleworkable” jobs, with the poor, the youth and women being more vulnerable than others, according to the International Monetary Fund (IMF).
“Young workers and those without university education are significantly less likely to work remotely,” Mariya Brussevich, Era Dabla-Norris and Salma Khalid wrote in an IMF blog published Tuesday, noting that the crisis could amplify intergenerational inequality.
The three IMF economists said women could be particularly hit hard, “threatening to undo some of the gains in gender equality made in recent decades.”
This, according to them, is because women are disproportionately concentrated in the hardest-hit sectors like food service and accommodation, and women carry a heavier burden of childcare and domestic chores, while “market provision of these services has been disrupted.” The authors also found that part-time workers and employees of small- and medium-sized firms face a greater risk of job loss.
“In developing economies, in particular, part-time workers and those in informal work face a dramatically higher risk of falling into poverty,” they said.
In a recently published study, the three IMF economists estimate that over 97.3 million workers, equivalent to about 15 percent of the workforce, are at high risk of layoff and furlough across the 35 advanced and emerging countries in their sample.
They found that the impact on low-income and precariously-employed workers could be particularly severe, amplifying long-standing inequities in societies.
“Our finding — that workers at the bottom of the earnings distribution are least able to work remotely — is corroborated by recent unemployment data from the United States and other countries,” they said. “The COVID-19 crisis will exacerbate income inequality.”
The authors also found significant differences across countries even for the same occupations. “It is much easier to telework in Norway and Singapore than in Turkey, Chile, Mexico, Ecuador, and Peru, simply because more than half the households in most emerging and developing countries don’t even have a computer at home,” they said.
As for what governments can do in this situation, the authors urged policymakers to focus on assisting the affected workers and their families by broadening social insurance and safety nets to cushion against income and employment loss, saying “wage subsidies and public-works programs can help them regain their livelihoods during the recovery.”
To reduce inequality and give people better prospects, governments need to strengthen education and training to better prepare workers for the jobs of the future, they said.
“Lifelong learning also means bolstering access to schooling and skills training to help workers displaced by economic shocks like COVID-19.”
Noting that this crisis has clearly shown that being able to get online was a crucial determinant to people’s ability to continue to engage in the workplace, they said investing in digital infrastructure and closing the digital divide will allow disadvantaged groups to participate meaningfully in the future economy.