“Covid could lead to a very large increase in global poverty, in fact it could send the world back 10 years and could send some regions back 30 years.”

– Andy Sumner, international development professor at King’s College London

INTRODUCTION

As the COVID-19 pandemic threw the world into chaos in March 2020, most agreed without question that sweeping lockdowns were a necessary public health measure to slow the spread of the virus. While justifiable, however, they have not been without consequences – millions of jobs have been lost worldwide as a direct result of pandemic mitigation measures, threatening to undo years of work in global development. 

In April 2020, the United Nations Univeristy’s World institute for Development Economics Research predicted that economic stagnation and collapse related to COVID-19 could set back development progress up to 30 years in some regions. (United Nations University, 2020). Real data from 2020 shows these figures were not that far off – 97 million additional people were thrown into poverty as a direct result of the pandemic, marking an unprecedented global high (World Bank Blogs, 2021).

Until economic activity can resume safely and normally around the world, mass unemployment will continue to drive global poverty rates to an all-time high and could even threaten the success of the UN Sustainable Development Goals. This will disproportionately affect the lives of vulnerable groups as well as people living in low- and middle-income countries.

In this blog post, we’ll be discussing:

• COVID-19 and the global rise in unemployment
• The risks to the success of the UN Sustainable Development Goals
• The future of global poverty
• Actions we can take

COVID-19 and the global rise in unemployment

Rising unemployment has proven to be one of the most devastating consequences of the COVID-19 pandemic. Globally, the equivalent of 255 million jobs were lost in 2020 as a direct result of pandemic-related business closures, ushering in the most severe economic and labour crisis since the Great Depression (International Labour Organization, 2021).

Governments around the world responded to this crisis in a number of different ways. In Canada, the Federal Government established the Canadian Emergency Response Benefit (CERB) and later the Canada Recovery Benefit (CRB) to keep unemployed citizens afloat during economic lockdowns (Government of Canada, 2021). Many other high- and middle-income countries rolled out similar welfare programs.

But not all countries offered the same robust social support. In India, for example, around 80% of the labour force was initially ineligible for many of the government’s economic stimulus packages because they worked in the informal sector (Human Rights Watch, 2020). As a result, when lockdown measures forced business closures across the country, millions were left without any source of income.

These varied policies have resulted in very different experiences with unemployment across the globe. For citizens who have been able to access unemployment benefits, there has been little worry that they will be able to meet their basic needs. But those without this safety net are put at increased risk of experiencing malnutrition, homelessness, and extreme poverty.

The risk to the UN Sustainable Development Goals

The sudden rise in unemployment has had and will continue to have a profound effect on the achievement of the UN Sustainable Development Goals.

The UN Sustainable Development Goals (SDGs) are a set of 17 global goals that provide “a blueprint for peace and prosperity” for all nations and future generations (United Nations, 2021). The SDGs were set by the UN General Assembly in 2015 with the hope that all goals would be achieved globally by 2030 (United Nations, 2021). 

Unfortunately, it no longer looks like this is going to happen as planned. While the global community was already off track to reach their target, the COVID-19 pandemic has slowed progress even further, setting back some goals by several years (Min and Perucci, 2020). What’s more, progress will likely continue to stall in the medium- and long-term as international travel and movement restrictions persist – barriers that make it incredibly difficult for NGOs and local development professionals to do their jobs (Kumar, 2020).

These effects will disproportionately affect the world’s poorest and most marginalized (Min and Perucci, 2020). Without the ability to access basic life necessities from their governments, humanitarian workers, or other international partners, those who were already vulnerable to begin with will be left to fend for themselves for an extended period of time. 

The future of global poverty

New data from the Brookings Institute published in June 2021 predicts that global poverty will continue to rise in the long-term, particularly among low- and middle-income countries (Brookings Institute, 2021). The UN predicts that global unemployment could reach 205 million by 2022, up from 187 million in 2019 (United Nations, 2021).

Some people will feel the impacts more severely than others. Women, for instance, have already been hit disproportionately by the crisis, seeing a 5 five percent employment fall in 2020 versus 3.9 percent for men (United Nations, 2021). Youths have also been hit hard, with employment falling 8.7 percent in 2020 versus 3.7 percent for adults (United Nations, 2021). These trends will likely persist as the crisis drags out over the next few years.

Vaccine access could also affect the global burden of unemployment and poverty (United Nations, 2021). High-income countries with robust vaccination programs are beginning to see decreases in hospitalizations and deaths, prompting the re-opening of most economic sectors (albeit with restrictions and vaccination requirements). But low- and middle-income countries that cannot widely distribute vaccines due to high prices and supply shortages are still unable to re-open with the same confidence. This leaves workers without a stable income for an even longer period of time.

In short, the future of unemployment and poverty will look very different depending on who you are and where you live. Those who are young, female, and live in a low-income and undervaccinated region will be put in an especially precarious position. 

Actions we can take

While prospects may look bleak, there are some crucial steps that legislators and global leaders can take to mitigate the impacts of COVID-19 on global poverty rates and the SDGs.

Firstly, where possible, governments should provide financial support to those who have been left without a job due to COVID-19 until stable employment can be found.

Secondly, the SDGs must be re-fitted to extend beyond the initial 2030 finish line. With all the COVID-19-related setbacks, it is clear that more time will be needed to achieve all 17 goals.

Thirdly, vaccines must be made accessible in low- and middle-income countries to avoid more lockdowns. This will allow economies to recover faster and help people find jobs.

Written by: Claire Borgaonkar, BPAPM (c)