The Income Fall of 2020

Fall in global income reaches 3.5 trillion dollars

‘The coronavirus pandemic has resulted in the equivalent of $3.5 trillion in lost working hours during the first three quarters of 2020 compared to the same period last year, according to the International Labour Organization’. ‘While an earlier estimate from the organization suggested the equivalent of 400 million full-time jobs would be lost in the second quarter of this year compared to the fourth quarter of 2019, the number is now estimated to be closer to 495 million full-time jobs lost during that time’.  – Cited Andrew Seaman – Editor LinkedIn News  The International Labour Organization in Switzerland have published the following: ▪️ Global working time lost in Q2 of 2020 was 17.3%, equivalent to 495 million full time jobs.* ▪️ Global labour income is estimated to have declined by 10.7%, or US$ 3.5 trillion, in Q1-3 of 2020, compared with the same period in 2019. ▪️ The biggest drop in labour income has occurred in lower-middle income countries, where the labour income losses reached 15.1%, with the Americas the hardest hit region at 12.1%. ▪️ Global working-hour losses are now projected to amount to 8.6 per cent in Q4 of 2020, which corresponds to the equivalent of 245 million full time jobs.* ▪️ The estimated fiscal stimulus gap is around US$982 billion in low-income and lower-middle-income countries (US$45 billion and US$937 billion, respectively).  Full report available here: *Compared to Q4 of 2019.

The summary of the above figures will have had direct affects on the global financial markets and in turn, investors portfolios. With future uncertain how do investors protect against further loss or at least add downside protection to a portfolio? It has been noted that corporations worldwide have requested employees to take salary cuts in order to reduce costs but remain solvent. For investors who are making regular contributions to savings plans how will this affect the ability to maintain regular contributions or the ability to meet them? What are the penalties for not being able to make contributions?  We are told from a young age and repeatedly in our professional lives that contributing regularly to a pension or savings plan will provide for us when we come to retire. Today we are entering uncharted waters where the employment market is concerned, and it is possible that saving for retirement is no longer the main goal but providing a second income or a primary income in the face of potential redundancy is. If you have clients who are now looking to diversify toward fixed income contact:



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