Middle East and North Africa: Labour market doldrums

Niveen Wahish , Wednesday 2 Jun 2021

Women, informal workers, and farmers were among the hardest hit by the Covid-19 pandemic in the Middle East and North Africa region, according to a new labour market survey

MENA’s women are burdened with increased care work
MENA’s women are burdened with increased care work

Over the past 18 months, the fallout from the coronavirus pandemic has hit economies and labour markets across the globe. In the Middle East and North Africa (MENA) region, that effect has been pronounced, according to a panel survey carried out by the Economic Research Forum (ERF), a regional think-tank based in Cairo.

Focusing on how the labour markets of Egypt, Jordan, Morocco, Sudan, and Tunisia evolved from before the pandemic until February 2021, the ERF Covid-19 MENA Monitor Panel Survey found that the pandemic has “contributed to job losses, reducing employment and increasing unemployment, as well as leading to exits from the labour force entirely,” according to a policy brief written by the principal investigators of the survey.

Many people who were employed in February 2020 had lost their jobs by February 2021, said Ragui Assaad, a professor of planning and public affairs at the University of Minnesota in the US and one of the principal investigators of the survey.

Assaad, who was addressing participants at a special session during the ERF’s 27th annual conference on Zoom, said that the February 2021 number of unemployed was better than that for November 2020, however. But he said that among those who were unemployed in 2020, many were still unemployed a year later.

The survey also found that many of those who lost their jobs were discouraged and left the labour force altogether. The latter group often included women who were unable to find jobs or did not look for jobs because they were too busy with care work at home and responsibility for children.

In addition to job losses, workers faced temporary layoffs, reduced wages, reduced hours, and delays in pay. Farmers and those running businesses have faced losses in demand as well as problems with inputs.

The way different countries managed the pandemic affected labour markets, according to Assaad. He said that Egypt, which had the least stringent response, but maintained it for longer and reduced measures gradually, saw moderate economic effects and maintained positive rates of economic growth.

Morocco, like Egypt, maintained moderate closure policies for longer and saw large negative effects on growth. But labour market aggregates have been recovering slowly.

Tunisia and Jordan saw a fluctuating response to containing the pandemic. This had a largely negative impact on their economies in 2020, and this will probably linger on into 2021, with a slow recovery in labour market aggregates, Assaad said.

The main threats for workers were for those who could not work from home and did not work for big firms or the government, said Mohamed Ali Marouani, an associate professor in economics at Paris 1 Panthéon-Sorbonne University in France and one of the principal investigators.

Informal wage workers, those without social insurance, and especially those working outside establishments or irregularly were particularly impacted by the pandemic, the policy brief said.

Farmers also saw losses. While many thought the Covid-19 crisis was chiefly an urban one, that was not necessarily the case, Marouani said, adding that farmers had had difficulty buying agricultural inputs because of closures and disturbed markets. Demand for their products had also fallen, he said, giving the example of Tunisia because of the lack of tourism and the loss of related demand.

“We should learn from this shock,” Marouani said. “If we had had good social protection, maybe the effects would have been less harsh for many people.”

Increasing the reach of social safety nets and their financing is a challenging but critical task to prevent a spiral of income losses that further depresses demand and to prevent deep poverty and its inevitable harms, the policy brief said.

Existing social safety nets and programmes to support businesses have limited reach and are not well-targeted to those most in need, said the brief. Relying on savings and family were much more common than receiving social assistance.

Assaad said models such as Egypt’s irregular worker programme giving financial assistance to irregular wage workers during the pandemic were promising. However, according to the policy brief, countries also need to think beyond the most vulnerable wage workers to consider designing policies and measures providing support for the self-employed, those running micro-enterprises, and farmers facing income losses comparable or worse than those of informal workers.

Another area the survey drew attention to was social services. Caroline Krafft, an associate professor in the department of economics and political science at St Catherine University in the US and one of the principal investigators of the survey, showed that during the pandemic there had been a retreat in social services and a rise in care work.

There were increases in the time spent caring for children compared to February 2020, especially for women with young or school-age children, Krafft said. This added up to long shifts for more women. Women with children under the age of six worked the longest hours, sometimes up to 12 to 14 hours per day in care work, Krafft added.

The “pandemic and closures exacerbated this challenge,” she said. “Women faced particular challenges with disproportionate and increased care work,” she added, pointing out that employment rates for women in the region were already low and declining even before the pandemic.

Krafft said it was not clear that the economic recovery would reverse such losses. “Careful monitoring and targeted policy action are needed to support the well being of those with income losses and to help women return to the work force,” she stressed.

The pandemic had helped to highlight the importance of social services such as nurseries, schools, and after-school activities for women’s employment. It could also help to encourage more investment in such areas, she said.

*A version of this article appears in print in the 3 June, 2021 edition of Al-Ahram Weekly

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