Future of work and COVID19 impact on local labour markets

26 May 2020

While necessary to combat COVID-19, the confinement and social distancing measures are putting unprecedented pressure on local labour markets. Unemployment is increasing and consequences of COVID-19 are likely to affect regions and cities differently with tourist destinations and large. The share of jobs at risk during confinement ranges from 15% to 35% depending on the regional economy

COVID-19 is hitting local labour markets at a time when megatrends related to digitalisation, automation and artificial intelligence are reshaping the way we live and work. As confinement measures begin to ease, these megatrends are likely to accelerate offering the opportunity to boost productivity and create new ways of working. Automation can however also create losers, as workers who suffer a job loss may not always have the skills needed to find new employment in a rapidly changing labour market. This economic crisis has also highlighted the plight of many gig and platform workers that have been providing essential services while also facing vulnerable employment conditions.

During EUROCITIES webinar on the impact of ‘Future of work and COVID19 impact on local labour markets’ the European Commission (EC), the International Labour Organization (ILO) and the Organisation for Economic Co-operation and Development (OECD) have identified some common challenges of the COVID19 on the labour market and employment:

  1. We are facing a very different crisis than all others in the modern era. The situation is rapidly evolving, having a widespread impact across different labour market segments. No one knows how long this crisis will last and what the ultimate impact and long-term implications will be
  2. Massive impact on employment affecting up to 30% of jobs in urban areas.
  3. Highest risk for job disruption is for low-skilled, those in informal economy, self-employed and the vulnerable groups such as youth (especially young men), migrants and refugees
  4. The key for the future lies in investing more in skills training: re-skilling, up-skilling, adult training, and making access to online skills training available to everyone (also focus on digital skills).
  5. Digitalisation and automation will be accelerated in many sectors.
  6. The challenges existed before covid-19 but are now even more prominent and urgent to address like basic digital skills, access to services online, digital online training and re-skilling.
  7. The sectors that are the most affected are retail trade, accommodation and food services, real estate and manufacturing.


Patricia Couti Policy Advisor


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