A workforce under pressure

In Asia and the Pacific, we depend on the ingenuity of a workforce of 2.1 billion women and men to power economic growth, competitiveness and sustainable development. They generate the tax revenues needed to pay for essential public goods and services, which they also produce, deliver and consume. Workers care for dependent family members. They are the bedrock of our societies, the engine of our economies.

But today, the working age population of Asia and the Pacific is under pressure, denied the decent work opportunities, affordable health care and social protection needed to fulfil its potential. The consequence is a workforce that’s insufficiently productive, healthy or secure. Half the region’s workforce is poor or teetering on the brink of poverty, surviving on $5.5 a day.

Source: ILO (2022), ILOSTAT. Available at www.ilostat.ilo.org (accessed on 17 March 2022)
Note: ILO modelled estimates are presented for 33 countries in 2021. The disaggregation of poverty within the workforce follows the three international poverty lines corresponding to income levels of countries. While extreme poverty is more applicable to low-income developing countries, moderate poverty is more relevant for lower and upper-middle-income countries. The last threshold applies to higher income countries. Subregional grouping in figure 1.1 follows ESCAP subregional classifications.

The main reason for this precarity is that two in three workers, 1.4 billion people, are employed informally. Despite longstanding GDP growth, total employment has grown only moderately in the past 15 years. In some countries employment has fallen. In others, informal jobs continue to grow at fast. So many workers have to accept informal jobs, without contracts and with low wages, irregular workings hours and hazardous conditions. Excluded from social protection and without access to health care, they are vulnerable to normal life contingencies and external shocks such as pandemics or economic downturns. They often lack the skills needed to unlock new opportunities or overcome the challenges of ageing societies, climate change and digitalization. They are inherently vulnerable. And this vulnerability undermines their productivity and keeps sustainable livelihoods out of reach.

Workers’ income security is undermined by the absence of social protection. Affordable, accessible and quality health care further damages workers’ health causes absenteeism and reduces productivity and economic output. Catastrophic out-of-pocket health spending threatens to push more people in our region into poverty than anywhere else. Poor health of children in low and lower-middle income countries is compounded by low investments in health care and education services. This undermines the future workforce’s job prospects and reduces future tax revenues and economic output. 

Less than half of Asia-Pacific’s population is covered by at least one social protection scheme

Share of population covered by at least one social protection scheme, 2020

Source: ILO (2020), World Social Protection Database. Available at https://www.social-protection.org/gimi/WSPDB.action?id=32
Note: Data are available for 45 countries across the Asia-Pacific region on percentage of population (population weighted averages), latest available year grouped by ESCAP subregional classification.

Illness and unemployment, pregnancy and old age, disability and injury, continue to push workers into poverty due to underinvestment in social protection. The COVID-19 pandemic has pushed additional eighty-five million unprotected people into extreme poverty, meaning they live on less than $1.9 per day, and a further 158 million into moderate poverty, meaning they live on $3.2 a day.

Even before the pandemic and the war in Ukraine, more than half of all people in the region had survived without cash income at some point during the preceding twelve months, more than a quarter without enough food and a third without necessary medical treatment. 

Such shocking vulnerability is not inevitable. Boosting access to decent jobs including access to universal health care and social protection could strengthen the social contract in Asia and the Pacific by reducing inequalities and increasing trust across our societies. Raising tax revenues by taxing personal income, wealth and capital gains that finances universal social protection, health care systems and supports the creation of decent jobs is critical. 

Decent jobs increase the purchasing power of workers and their families and support the growth of local economies. Universal Health Coverage is a long-term investment in health, human capital and productivity. Responsive social protection schemes is key to strengthen workforce resilience.