Coronavirus: Informal Workers Need Greater Support

Policies to ease the economic fallout of Covid-19 tend to address formal activities. But the effect is much worse for informal workers, who constitute the bulk of the global workforce

- CP Chandrasekhar, Jayati Ghosh

The global devastation caused by Covid-19 is only just beginning, with the severe threat to public health worsened by the evident inability of most health systems across developing and developed countries to cope with it. Many states across the world appear to have realised the serious potential of this pandemic and have declared lockdowns, closures, partial curfews and curtailment of all but essential activities in efforts to contain the contagion.

The economic impacts of such lockdowns are also just beginning to be felt, and will escalate in the coming months. The discussion on the economics of this pandemic has tended to focus on supply disruptions and the likely financial losses of companies — especially those in travel, transport and other services and manufacturing activities. Precisely because companies have more lobbying power and a louder political voice in general, they have already started clamouring for (and are being offered) incentives, bailouts and other relief measures to allow them to cope with this crisis.

However, the worst material impacts are being felt by informal workers, who face a dismal spectrum of probabilities of loss of livelihood — from declining earnings among the self-employed to job losses among paid workers. These are likely to get much worse in the coming months. Even so, barring just a handful of countries, very few governments have declared strong measures to cope with these effects — and therefore they are letting loose forces that could be even more devastating for poor people across the world. In the worst-case scenario, this could even mean that more people could die from hunger and the inability to treat other problems than those because of the virus.

Large share