What impact from COVID-19 on employment?

18 May 2020

Eurocities has brought together European Commission (EC), the International Labour Organization (ILO) and the Organisation for Economic Co-operation and Development (OECD) to present the key challenges of the COVID19 on the labour market and employment in a webinar organised on 12 May. Done in partnership with OECD, the online event gathered more than 190 city practitioners.

The crisis arising from the COVID-19 is different than previous crisis. The urban areas, especially the capital and large cities have a higher share of job potentially at risk. As the impact at local level is asymmetric the policy responses need to be adapted to the local needs and the recovery will take much longer.

The key trends identified in the presentations

  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.

Giving all the existing challenges, there is a need to have a bigger focus on skills and to support the skills transition. As cities are the best placed to make the matchmaking between people needing jobs and the sectors demanding labour the current situation brings a good opportunity to re-thinking how to match the offer and demand for new skills.

Follow-up and potential recovery measures – International Labour Organization

  • Stimulating the economy and employment. International coordination will be important going forward, and it is currently missing.
  • Supporting enterprises, jobs and incomes. Adequate social protection and target the most vulnerable.
  • Protecting workers in the workplace. Adopt work arrangements, prevent discrimination and exclusion and ease access to paid leave.
  • Relying on social dialogue for solutions. Strengthen social dialogue, collective bargaining and labour relations institutions and processes.

Possible long-term scenarios for local labour markets – OECD Centre for Entrepreneurship, SMEs, Regions and Cities

  • Acceleration of digital transition (e.g. automation of jobs, smart and teleworking, digital). It means that there is an Increased need for digital infrastructure and tools for all communities and households
  • Revisiting globalisation through re-location of production in strategic/ essential goods and services, diversification of suppliers and restriction of movement
  • Sense of collective destiny/public goods through increased willingness to implement green measures to create jobs fast, increased role for the social economy and corporate social responsibility and resilient health systems for workforce
  • Reimagining public life by rethinking cultural and sporting events and other public gatherings
  • The need to start planning today for the long-term recovery. Massive need to adapt education and training systems, support local firms, assess new opportunities for local economy, ensure governance is up to the task.

The up-coming EU initiatives to prepare workers for the future of work

  1. Minimum wages initiative: The European Commission is currently preparing the 2nd stage consultation on this initiative. The schedule and planning have been delayed due to the pandemic.
  2. Reinforced Youth Guarantee: It will address the challenges in the current programme, as well as strengthening its concept. The proposal is expected to be launched by end of June.
  3. Updated skills agenda: The Commission is looking into how to explore individual learning, and into closing the gap between the participation in education and training across the European countries.

Madrid, Stockholm and Barcelona have shared their challenges and immediate responses

The city of Madrid has been hit hard by coronavirus having around 140 thousands jobs affected from different sectors like accommodation service, catering, retail and commerce. To react to all the challenges the employment agency has put in place measures like standardisation of remote work, launch of new career guidance and job services online.

In Stockholm the economic impact of the crisis is felt on sectors such as cultural and creative industries, constructions, retail and restoration, where unemployment is rising rapidly. They also face the challenge of vulnerable groups are becoming even more vulnerable. The city enabled different stimulus packages for adult learning, training to re-skilling. They have also worked on matching thousands of unemployed people from different sectors with health sector companies looking for workers.

In Barcelona sectors such as tourism, culture or retail have been the most affected. The city has organised its responses through a central coordination committee focusing on health measures and now it has another one on the economic responses. It had put together measures to support companies not to bankrupt and to help people to have access to reliable information about the different support available, especially related to worker’s rights.

This was one in a series of online city dialogues organised by Eurocities to inform, connect cities and facilitate city-to-city dialogue on responses to fight COVID-19 crisis and its impact.
EUROCITIES will follow-up with a WG Employment meeting on 10 June (TBC) for cities to discuss together about their employment and labour market recovery plans.

1. You can find here the recording of the webinar – part 1 and part 2: