Coronavirus vaccination reduces job losses, UN labor agency reports.

At a time when many Americans are voluntarily quitting their jobs, the world is struggling to put people back to work and overcome economic disparities worsened by the ongoing COVID-19 pandemic.

The International Labour Organization (ILO) says in a new report that the coronavirus pandemic has taken a heavy toll in working hours lost in 2021 but the roll out of vaccines has tempered those losses. Its findings provide support for vaccination as an important route to gaining employment.

“The current trajectory of labor markets is of a stalled recovery, with major downside risks appearing, and a great divergence between developed and developing economies” said ILO chief Guy Ryder. “Dramatically, unequal vaccine distribution and fiscal capacities are driving these trends and both need to be addressed urgently.”

“A two-speed recovery between developed and developing nations threatens the global economy as a whole,” the report said in an analysis of the impacts of COVID-19 on the world of work.

The Joe Biden administration can notch a success to its record on job markets despite the flak it receives every day from multiple sides on numerous issues. Vaccination drives and other measures have put the US in an enviable position where one in four Americans have voluntarily quit their jobs whereas workers elsewhere are desperately searching for work.

This points to a tightening labor market in the US, which is forcing companies to raise wages to lure workers and fueling inflation. Even the rich European countries are far short of the point where job-seekers have a similar upper hand over employers.

The COVID-19 crisis has greatly impacted productivity, workers and enterprises and increased economic disparities. The productivity gap between advanced and developing countries is likely to widen to 18:1 in real terms, the highest recorded since 2005.

This great divergence is driven by the major differences in the roll-out of vaccinations and fiscal stimulus packages. Globally, losses in hours worked in the absence of any vaccines would have been 6.0 percent in the second quarter of 2021, rather than the 4.8 percent recorded after vaccination drives began.

Estimates indicate that for each 14 persons fully vaccinated in the second quarter of 2021, one full-time equivalent job was added to the global labor market. This substantially boosted the recovery.

The report estimates that global hours worked in 2021 will be 4.3 per cent below pre-pandemic levels of the fourth quarter of 2019. That is equivalent to a loss of 125 million full-time jobs worldwide and a sharp rise on the ILO’s earlier projection of 3.5 per cent or 100 million full-time jobs.

The highly uneven roll-out of vaccinations means that the positive effect was largest in high-income countries, negligible in lower-middle-income countries and almost zero in low-income countries.

These disparities should be addressed through greater global solidarity in spreading vaccines. If low-income countries had more equitable access to vaccines, working-hour recovery would catch up with richer economies in just one quarter.

Fiscal stimulus packages were the other key factor in the paths of recovery. But 86 per cent of global stimulus measures were concentrated in high-income countries. Estimates show that on average, an increase in fiscal stimulus of 1 per cent of annual GDP increased annual working hours by 0.3 percentage points compared to the last quarter of 2019.

Without concrete financial and technical support, a “great divergence” in employment recovery trends between developed and developing countries will persist, ILO warns. That could drag down the global economy.