COVID-19 crisis in Iraq disproportionately affects young workers and the informally employed

A new rapid assessment on the impact of COVID-19 on households and enterprises in Iraq highlights the devastating effects of the pandemic on vulnerable workers and their households and on small-scale businesses.

Press release | 16 July 2020
Iraq (ILO News) A new rapid assessment on the impact of the COVID-19 pandemic fallout on vulnerable households and small-scale enterprises in Iraq highlights the adverse impact of the pandemic on employment and income, particularly among younger workers and those in informal employment.

Based on a sample of 3,265 households and 1,175 business enterprises, the assessment examines employment challenges which existed prior to the lockdown and implications of the pandemic on vulnerable workers and their households, in relation to employment, income, economic conditions, and prospects for the immediate future. In addition, the assessment addresses the effects of the pandemic on small-scale enterprises, including how they are adapting to new challenges in light of the crisis and implications on workers.

The assessment was conducted in June 2020 by the International Labour Organization (ILO) and Fafo Institute for Labour and Social Research (Fafo), in collaboration with the Cash Consortium for Iraq (CCI), comprised of the Danish Refugee Council (DRC), the International Rescue Committee (IRC), Mercy Corps, the Norwegian Refugee Council (NRC) and Oxfam, in addition to the United Nations Development Programme (UNDP).

It found that unemployment rates were high among women and youth even before the pandemic and a high degree of informal employment among younger workers. The vast majority of respondents indicated that they had no social security or health insurance coverage.

About one-quarter of those who were employed prior to the lockdown reported that they were permanently laid-off, with 36 per cent of those in the age group of 18-24 reporting that they were permanently dismissed.

Respondents employed under verbal agreements have had a 40 per cent reduction in their income in recent months. Only 16 per cent of the surveyed households reported having any savings, with 85 per cent indicating that their savings would last less than three months.

“Findings show the extent to which economically vulnerable households are affected by the pandemic and the limited mechanisms available to help them cope,” said Maha Kattaa, ILO Country Coordinator for Iraq. “They also show that women and young workers were already facing immense challenges to access the labour market prior to the COVID-19 pandemic. The current crisis has worsened their situation as they now face further barriers in accessing and retaining decent jobs.”

Impact on small-scale enterprises

The assessment found that one-third of surveyed enterprises were operating as they did before the pandemic, while 39 per cent were operating with reduced hours. Sixteen per cent have closed down their businesses.

While only a few enterprises have laid off their workers either permanently or temporarily, the majority are not paying employees who are not able to work.

Almost half of the surveyed enterprises were confident they would weather the crisis, while 33 per cent indicated that they were not confident that their businesses would survive. The majority of the surveyed enterprises were not aware of any support packages offered by the government or other actors to help them cope with the present crisis. The most sought-after support was direct financial support, followed by wage subsidies.

The report provides key recommendations for immediate action and longer-term policy measures. Recommendations for the immediate term include ensuring that workers, households and enterprises are made aware of existing support packages available to them, and providing cash and in-kind support to workers and enterprises that have lost income due to the COVID-19 pandemic. In the longer term, the report recommends providing equal social security benefits for both public and private employees in Iraq, regardless of nationality or status, to ensure the inclusion of the most vulnerable in social protection schemes, which promote basic income security and access to health services.

The assessment was carried out as part of a larger initiative examining the impact of the COVID-19 pandemic on labour markets in Iraq, Jordan and Lebanon. It is the final one in a first round of studies looking at the immediate economic impact of the pandemic on vulnerable households and businesses. Follow-up surveys, examining the longer-term economic impact of the crisis are being prepared for the coming months in the three countries.