HOW TO BRIDGE POST COVID UNEQUAL EFFECTS AMONG WORKERS.
Most companies around the world are struggling to survive due to post-covid effects. This has led to job loss among many workers. The worst hit are low-skilled and young inexperienced workers. Some sectors will shrink permanently while others will re-adjust and expand. A research done by World Economic Outlook in April this shows that job retention support can more likely reduce the rise in income inequality the first few months after crisis. With the help of labor to shift to new jobs, the research showed that the combined , well sequenced policy package can more likely dampen the increase in income inequality over the medium-term as captured by Gini-index(a common measure of inequality)than if each type was used.
Partial unemployment benefits is among some job retention support and other subsidies to maintain worker' links to their employers should be in place when the pandemic is acute and other measures like lockdown are in place. In emerging markets like Kenya and other middle income countries where majority of the people depend on informal jobs, support policies should be put in place. For instance there should be cash-transfer programs targeting informal workers.
Most countries use two models to deal with unemployment challenges associated with a pandemic:
1. Emphasizing income support for those losing their jobs or livelihoods through expanded unemployment insurance and other cash transfers.
2. Emphasizing job retention through wage subsidies , layoff restrictions and short term compensation schemes.
Source; IMF and VOX EU
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