Comparing income supports
around the world

di Priscilla Pajdo del February 19, 2021

TORONTO - Economic recovery has not been easy in the wake of Covid-19. Unemployment, reduced work hours and the closure of countless businesses leave many individuals facing financial hardship.

The loss of income earnings prompted by wide-spread lockdowns have created an intense need for financial support. These supports vary among countries around the world.

In 2020, the International Labour Organization (ILO), estimated global labour income to have declined by 8.3%, or $ 3.7 trillion USD ($5.1 trillion CAD), relative to 2019. The figure, equivalent to 4.4% of the world’s gross domestic product (GDP), does not include the government income supports issued to individuals affected by workplace closures during the pandemic.

When it comes to countries providing income support, there are significant variations across geographical regions. In this context, the term “income support”, is broadly defined as covering lost salaries, providing universal basic income or direct payments for people who have lost their jobs or cannot work.

Some governments have not implemented such income support programs. For instance, Our World in Data, which tracks income supports during the Covid-19, identifies several countries which provide no support for lost earnings.

Venezuela, Syria and India are just a few countries that do not have a universal scheme to help citizens recover wages lost due to the pandemic.

Yet, according to the ILO, working hour losses were particularly high in Latin America and southern Asia.

Furthermore, a majority of low-middle income countries do not have the means to offer such stimulus payment programs.

Across the globe, other countries such as Italy, Portugal and Australia offered programs where less than 50% of lost wages have been paid out to their citizens. Italy, for instance, relies on job-retention schemes that subsidizes workers’ earnings during the health care crisis.

As countries around the world continue to feel the effects of the coronavirus, some governments, sporadically offer direct payments to cover more than 50% of lost wages. Canada, the USA and the UK are among the most supportive governments to offer financial relief to those impacted by the pandemic.

For example, Canada introduced the Canadian Emergency Relief Benefit (CERB), to help Canadians struggling from lost income prompted by lockdown measures to mitigate the spread of the virus.

From the first payments issued mid- March to October 2020, the CERB paid out $82 billion CAD to 8.9 million Canadians impacted by lost wages. The program has since been replaced by new employment income benefits at a cost of $37 billion.

As countries continue to double-down efforts to fight the virus, the quality of recovery will depend on a wide range of social, economic and political factors. It will not come easy, especially as new virulent strains of the virus threaten a third wave and future lockdowns.

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