China lockdowns, war risk derailing global jobs recovery

An empty road is seen at Shanghai Central Business District (CBD) during a lockdown

The global job market is at risk of doing a U-turn on its path towards recovering to pre-COVID-19 levels as lockdowns in China and the war in Ukraine weigh on economies, the International Labour Organization (ILO) said in a report on Monday.

The U.N. agency estimated that there was the equivalent of 112 million fewer full-time jobs in the first quarter of 2022 compared with pre-COVID levels, and there was a growing but uncertain risk that the amount of hours worked would continue to decline over 2022.

China accounted for 86% of the dip in working hours due to containment measures to stop the spread of COVID-19, according to the report, and global supply chain disruptions exacerbated by the war in Ukraine threaten to lead to a further decline.

ILO Director General Guy Ryder told journalists that the figures likely do not capture the effects of the Ukraine war.

The ILO, which said the outlook was increasingly clouded, now forecasts there will be the equivalent of 123 million fewer full-time jobs versus pre-COVID levels in the second quarter.

“There is a very real danger that the next monitor, whenever we produce it, will be quoting figures that will represent quite a sharp deterioration in labour market conditions,” Ryder said.

Rising inflation, driven mainly by energy prices and supply chain issues, also poses a risk of stalling an economic and jobs recovery if workers’ incomes do not keep step, the ILO said.

The overall risk of a wage-price spiral in the near future is low, the U.N. agency added, pointing out that real wages grew more slowly in 2021 than they had before the pandemic.

Source: Reuters