The coronavirus virus has dealt a strong blow to the world economy, causing workers to stop working and bankrupt businesses around the world.
But a few months after the crisis, a clear divide between survivors and casualties was emerging. Countries, workers, and industries that depend on making furniture – from computers to furniture to toys – are slowly growing or even thriving amid economic crisis.
Meanwhile, those providing the kind of in-person services people avoid out of fear of infection ̵1; traveling, going out to eat, going to the movies and some childcare – are struggling. Services that do not require physical intimacy – such as many financial services, software and telecommunications – are less severely affected, as are construction and agriculture.
This divide between production and services means that pain has been reduced especially badly for female and migrant workers, and economies with large or highly exposed informal sectors calendar, entertainment and travel.
That split is particularly alarming with a spike this fall in much of the West, showing that workers, companies and countries dependent on services face a rebound. Long-term and painful recovery is possible until Covid-19 vaccine is widely used.
According to the International Monetary Fund’s growth forecast, the world economies are diverging stronger this year than ever before. Much of the difference seems to have come from the economic structure of countries that have been in crisis, rather than from their virus handling.
Asia’s manufacturing and export-focused economies have performed well, while those with large tourism have been hit, even as the pandemic is under control.
Thailand, for example, has only reported a handful of local cases in the past three months, but relies heavily on tourism and has suffered damage. On the other hand, Taiwan is a major exporter of computer components and electrical machinery.
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Factories have largely recovered from nationwide shutdowns imposed by some countries in the spring, while trade with China – which is a major input producer for many manufacturers – has recovered .
But the direct services are still in a slump. In the UK, for example, industrial production in August was only 6% lower than in February, but service output fell 9.6%.
In September, global auto production marked the biggest production leap in a decade, as consumers avoid public transport …
… but travel and entertainment are still depressed.
That is hurting jobs …
… as well as the balance of payments of some countries heavily dependent on tourism.
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Contrary to what happened in the aftermath of the global financial crisis, this time women have suffered more job losses, in part because they are highly represented in direct service jobs. For economists, this is one of the major changes in the current recession, with men losing jobs more than women in every six recessions recorded in the US since 1970. .
Employment reductions in the three months to June year-on-year were greater for women in most of the countries surveyed by the International Labor Organization.
In the US, hospitality and entertainment jobs saw the biggest drop in September since the start of this year, a sign that a new spike in infections is still affecting jobs. of women.
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Immigrants are especially hit hard by the closure of restaurants, bars and other businesses involved in direct contact. Immigrants account for a larger share of employment in the catering and accommodation industries than in the general workforce, especially in Europe. Without those jobs, many people are forced to return to their home countries.
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In many parts of the world, but especially the poorest countries, a large portion of the workforce makes a living in addition to formal employment. According to the International Labor Organization, more than two billion people work in the informal economy globally, including more than 80% of workers in densely populated countries like India, Indonesia and Nigeria.
The informal sector jobs are often in the service sector, from cleaning homes to washing dishes in restaurants. Many of these jobs fell victim to recession.