Impact on Businesses and Jobs
The pandemic slowdown has deeply impacted businesses and jobs. Around the world, companies – especially micro, small, and medium enterprises (MSMEs) in the developing world – are under intense strain, with more than half either in arrears or likely to fall into arrears shortly. To understand the pressure that COVID-19 is having on firms’ performance as well as the adjustments they are having to make, the World Bank and partners have been conducting rapid COVID-19 Business Pulse Surveys in partnership with client governments.
These offer a glimmer of good news. Responses collected between May and August showed that many of these firms were retaining staff, hoping to keep them on board as they ride out the downturn. More than a third of companies have increased the use of digital technology to adapt to the crisis. The same data warned, however, that the firms’ sales have dropped by half amid the crisis, forcing companies to reduce hours and wages, and most businesses – especially micro and small firms in low-income countries – are struggling to access public support. Reduced family incomes – whether due to job loss, a stop in remittance payments, or a multitude of other COVID-19-related factors – will continue to put human capital at risk. With less money, families will be forced to make trade-offs and sacrifices that could harm health and learning outcomes for a generation.