International Labour Organisation’s (ILO) Director-General, Gilbert F. Houngbo said ‘preventing scarring’ and protecting the most vulnerable workers by increasing minimum wages and guaranteeing social protection benefits should be among the priority responses to the current economic and social crisis.

Other priority policies include investment in social protection and productive employment through the Global Accelerator on Jobs and Social Protection for Just Transitions . The Global Accelerator aims to stimulate the creation of 400 million jobs, including in the green, digital and care economies, and the extension of adequate social protection to the four billion people currently without coverage.

In his written statement to the joint World Bank-IMF Development Committee, Houngbo noted that increasing productive employment was essential to reduce inequality. Greater formalisation of employment was also necessary to improve business productivity and sustainability, promote decent work, and give governments more financial resources to address poverty and inequality, Houngbo added. Long-term policies to tackle persistent large gender gaps, including in pay, pensions and quality of work, were also needed.

The Director-General described a cost-of-living crisis fuelled by higher prices and a decoupling of wage growth from productivity growth, leading to falling real wages.

“Without immediate action and increased resources this could increase inequality and place greater strain on businesses,” he said.

Houngbo also highlighted the need for increased support for vulnerable economies, who may face high and increasing debt. Greater respect for labour rights and the promotion of sustainable enterprises and better working conditions in supply chains could catalyse economic development, poverty reduction and greater income equality between countries, he said.