two out of three workers are in the informal sector

An ESCAP report denounces that GDP growth in the last 15 years has not been accompanied by an adequate increase in employment. The calls working poor they are also on the rise: in Asia, vulnerable workers are at risk of falling into poverty due to high healthcare costs. The aging of the population is the main concern: in 2050 there will be one billion people over the age of 65 in Asia and Oceania.

Milan () – The workforce on the Asian continent is not “productive, protected and healthy” enough. This is stated in a report published yesterday by the Economic and Social Commission for Asia-Pacific (ESCAP) entitled “The workforce we need. Social Outlook for Asia and the Pacific“.

The reasons for this qualitative scarcity of the productive force must be sought in the growth of informal work. A phenomenon that affects 68% of workers -approximately two out of three-, that is, 1,400 million people, 600 million of whom are employed in the agricultural sector.

In other words, GDP growth in Asia over the past 15 years has not been accompanied by an adequate increase in employment. In some countries it has even slowed down: most of this “jobless growth” has occurred in South Asia, where millions of workers are forced into informal jobs characterized by no contracts, low wages, irregular hours and dangerous working conditions.

Informal employment increased in 14 of the 19 countries in the region for which data are available. Also, between 2010 and 2021, 20 million precarious jobs were created and in some countries (Afghanistan, Laos, North Korea, Nepal, Papua New Guinea) these grew even faster than total employment. Currently, half of Asian workers lack any form of social protection and are therefore “highly vulnerable to systemic shocks”, according to the report. Only in Mongolia, Kazakhstan, Australia, New Zealand and Singapore do 100% of the population enjoy at least one social protection scheme, followed by Japan with 98% and Georgia with 97% (see figure 1) .

The vulnerability of the workforce undermines its productivity: the inability to access a health system increases absenteeism due to illness. With this, poverty grows and the productive force decreases, which in Asia has fallen below the world average. The health status of workers is directly related to labor productivity and the development of a nation, but workers in low- and middle-income countries can expect to die 13 years earlier than those in high-income countries. On the other hand, Asia’s infant mortality rates are 10 times higher (see Figure 2). Medical expenses are so high that millions of families are forced to live in poverty; in 2017 this figure was 16%, the highest worldwide.

Another consequence of the increase in informal and precarious work is that half of Asian workers (3.2 billion individuals, more than half of the global workforce) are working poors, working poor or near poor, earning less than $5.50 a day. At least 158 ​​million people earn $3.2 a day (moderate poverty), while 85 million live in extreme poverty, that is, on less than $1.9 a day. The most significant increases are recorded in Papua New Guinea, Solomon Islands, East Timor, Cambodia, Laos and India. (see figure 3).

Even before the pandemic and the war in Ukraine, more than half of the continent’s workers lacked regular income for 12 months of the year. More than a quarter did not have enough food and a third lacked health protection to continue working. All this translates into a loss of physical and human capital and additional labor.

According to ESCAP, there are three future trends that could further undermine the conditions of the poor and precarious workers, further increasing inequalities: climate change, digitalization and an aging population.

As there are no adaptation policies, natural disasters mainly affect small businesses. If current trends continue, ESCAP projections place a third of Asian workers at high risk. Of the 10 most vulnerable countries in the world to climate change, eight are in Asia.

Something similar is happening with digitization, which runs the risk of leaving a large segment of the population behind: in Asia-Pacific, less than two-thirds of the population has access to the Internet, compared to 90% on average in developed countries .

Those over 65, meanwhile, have gone from 171 million in 1990 to 445 million in 2021 and are expected to increase again in 2050, exceeding one billion. As a result, the average age of the entire population and workforce will increase from 32.5 years in 2020 to 40.3 in 2050. In the near future, a reduced workforce will have to support a growing number of retirees. and pensioners. Therefore, underlines ESCAP, “it will be increasingly important to expand the range of decent work opportunities for older workers and support them to remain productive and healthy through a health care system that meets the needs of older people. “.