Coronavirus and its effects on labor market

Sara Velkoska

The beginning of 2020 was marked by the occurrence of the COVID-19 pandemic. To prevent the spread of the virus the governments have taken a number of restrictive measures, with social distancing having the key role. As an outcome, the halth crisis strongly affected the economic life and the labor market. The lock-down and other health-related measures led to the temporary closure of many businesses. According to the International Labor Organization the virus and the subsequent economic shock will impact the world of work across three key dimensions: the quantity of jobs (both unemployment and underemployment), the quality of work (wages and access to social protection) and the effects on specific groups who are more vulnerable to adverse labor market outcomes. It is expected that corona crisis to significantly increase the number of unemployed and underemployment.

Following the examples of previous crises, the demand for labor, as well as wages and working hours, will decrease. While self-employment does not typically react to economic downturns, it acts as a “default” option for survival or maintaining income. For this reason, self-employment tends to increase during crises. In Slovenia, according to SURS, in January 2020, 94,100 (or 10,5%) of people that got employment, were self-employed or 1.4% more than in December 2019. This shows that more people are becoming part of the process of precarization. The trend of precarization of life is becoming more and more frequent in the modern labor market and it is in fact constant, especially since the last global economic and financial crisis in 2008.

In the current corona period, its growth is expected with fear, as the global economy due to the COVID-19 pandemic and the consequent complete shutdown of the world in all areas of economic activity (industry, tourism, culture, transport and passenger transport), except health, according to economic analysts and financial experts, is threatened by a deeper recession, if not, to some extent, even an economic depression. Because of quarantine measures and a fall in economic activity there is, also, a significant income lose for workers. This crisis situation can have a major negative impact on certain segments of the population (ILO, 2020), such as:

• Young workers, who are already facing higher rates of unemployment and underemployment, are more vulnerable to falling labor demand, as well as the older workers.
• Women are over-represented in more affected sectors (such as services) or in occupations that are at the front line of dealing with the pandemic (e.g. nurses).
• Unprotected workers, including the self-employed, are more likely to be disproportionately hit by the virus as they do not have access to paid or sick leave mechanisms, and are less protected by conventional social protection mechanisms and other forms of income smoothing.
• Migrant workers are particularly vulnerable to the impact of the COVID-19 crisis, which will constrain both their ability to access their places of work in destination countries and return to their families.

These groups are exactly those that were precarious even before the pandemic. They are therefore defined by low social security (often not exceeding the poverty line or carrying a higher risk of poverty) and living in a constant state of uncertainty, which now is even more noticable. From January this year (2020), the data show that the total number of self-employed people in Slovenia is growing sharply, which is 70% more compared to January last year (SURS). A typical example is the linguists, who in Slovenia are mostly self-employed. Data from 2018 show that 60% of people working as translators, lectors and language teachers are self-employed. During the pandemic, this percentage increased. Although self-employed translators characterized with autonomy and flexibility, the fact remains that the self-employed are generally under greater pressure in their work due to more working hours, additional unpaid work, short-term assignments with shorter deadlines for the increased volume of work, increasing downward price competition and uncertainty about further business, as they look for work and manage it themselves. Added to this, are the current challenges caused by COVID-19 pandemic, such as the stagnation of the economy and employment, the temporary closure of many companies, work from home and the reduced volume of work engagements. Due to the nature of the translation work of self-employed individuals, which is inconsistent in quantity and distribution, work space and time, this often results in social exclusion, isolation and loneliness, stress or worse – work burnout (Benčina 2019). Additionally, the lack of paid sick leave increases their fear, and insecurity, leading to constant stress, with consequences for their mental health. This trend of self-employment covers a number of areas, not just linguists.

Another area that is significantly affected by the current crisis is film-directing. According to the directors, this is the worst year in Slovenian film. During 2020, they faced a complete blockade. All films remained unpublished due to lack of funds. For film directors, as precarous workers, the only source of income is the complitely finished and published film. Currently, Slovenian government has blocked 33 film projects, mostly completed. This has left many filmmakers without a basic income. They are not able to cover their basic living expenses, such as rent, bills, food, taxes, insurance, which further reflects on their way and quality of life, affecting their physical and mental health. This situation does not apply only to the film industry, but to the entire cultural area.

On the other hand, many people who are most exposed to the virus, such as hospital cleaners, people who deliver food, taxi drivers and hand disinfectants in front of markets, are not entitled to compensation. These are the professions that currently maintain the social system, but still their work is not recognized and properly rewarded. The current situation has made them afraid to claim their rights because they may lose their jobs. The pandemic has empowered employers to manage the lives of employees, constantly threatening to fire them. Employees’ fear of losing their jobs has given employers the opportunity to make the most of them, giving them a lot of work, short deadlines and paying them low wages. Employers are the ones who set the rules for work, putting employees in a very precarious position. The line between work and leisure has been lost, the stress is now transmited into the homes of employes, as the place from where they work threatening their general well-being. As a solution, society should go in the direction of putting man before profit, which may result in a reduction in the percentage of people involved in the precriat. The corona crisis has given us a great opportunity to reconsider our priorities, as well as question ourselfs about what kind of society we would like to live and work in.