Global job losses from virus 4 times as bad as ’09 financial crisis

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Four times as many jobs were lost last year due to the coronavirus pandemic as during the worst part of the global financial crisis in 2009, a U.N. report said Monday.

The International Labor Organization estimated that the restrictions on businesses and public life destroyed 8.8% of all work hours around the world last year. That is equivalent to 255 million full-time jobs – quadruple the impact of the financial crisis over a decade ago.

“This has been the most severe crisis for the world of work since The Great Depression of the 1930s. Its impact is far greater than that of the global financial crisis of 2009,” said ILO Director-General Guy Ryder. The fallout was almost equally split between reduced work hours and “unprecedented” job losses, he said.

The United Nations agency noted that most people who lost work stopped looking for a job altogether, likely because of restrictions on businesses that hire in big numbers like restaurants, bars, stores, hotels and other services that depend on face-to-face interactions.

The drop in work translates to a loss of $3.7 trillion in income globally — what Ryder called an “extraordinary figure” — with women and young people taking the biggest hits.

The ILO report expects a bounce back in jobs in the second half of the year. But that depends on a reduction in coronavirus infections and the rollout of vaccines. Currently, infections are rising or remain stubbornly high in many countries and vaccine distribution is still slow overall.

Global shares mostly turned lower on Monday on concerns about the economic damage of a rise in coronavirus cases in some countries and as investors looked to upcoming company earnings.

European benchmarks lost early gains after the Ifo index of German business confidence fell more than expected in January, reflecting the impact of new restrictions on public life. Germany’s DAX was down 1.2% to 13,703.

France’s CAC 40 fell 1.1% to 5,500 and Britain’s FTSE 100 slipped 0.9% to 6,637. U.S. shares were set for a cautious open, with Dow futures down nearly 0.4% and S&P 500 futures up 0.1%.

Earlier, Japan’s benchmark Nikkei 225 gained 0.7% to finish at 28,822.29. Australia’s S&P/ASX200 added 0.4% to 6,824.70. South Korea’s Kospi gained 2.2% to 3,208.99. Hong Kong’s Hang Seng jumped 2.4% to 30,159.01, while the Shanghai Composite rose 0.5% to 3,624.24.

Investors are weighing evidence of the economic damage of current coronavirus restrictions against hopes that once the pandemic comes under some control, economies will bounce back.

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Republished with permission from The Associated Press.