AIDS Ravages Labour Force

Image: Flickr, anqa
Image: Flickr, anqa

Study of 50 countries indicates high cost of inaction to private sector; Africa worst hit an estimated 36.5 million people engaged in some form of economic activity worldwide are HIV-positive, resulting in an annual loss of $25 billion in productivity – twice the yearly gross domestic product of Kenya.

But that is just the start. In the years to come, according to a new study of the impact of HIV/AIDS in the global labour force released in July by the International Labour Organisation, the number of infected workers and the consequent loss of productivity will climb sharply. By 2005, the report predicts, the cumulative loss of workers worldwide from the epidemic will reach 28 million. That figure could climb to 48 million by 2010 and 74 million by 2015.

Already the worst affected continent, Africa is home to 70% of the world’s labour force infected with HIV.

‘Loss of human resources due to HIV/AIDS will especially damage the capacity of the state to supply essential goods and services, with far-reaching effects on the rest of the economy,’ according to the report, HIV/AIDS and Work: Global Estimates, Impact and Response.

Calamity in the Making

Some African countries have staggering figures of HIV-positive economically active people: South Africa has 3.7 million, Nigeria 2.4 million, Tanzania 1.4 million, Ethiopia and Zimbabwe 1.1 million each, and Kenya 1 million.

‘HIV/AIDS destroys human capital built up over years and weakens the capacity of workers to produce goods and services for the economy. This loss of skilled labour, together with the increase in care and treatment costs, tends to depress production, hamper savings and impede investment in the long run,’ the study concludes.

‘At the same time, reduced economic growth due to HIV/AIDS affects the public revenue base, reducing public expenditure on education, as well as on other sectors such as health that help build and sustain human capital.’

The impact is especially acute for women, who are more easily infected than men and traditionally bear a heavier burden in caring for sick family members, which in turn decreases the amount of time they have to spend either in formal employment or in traditional roles such as subsistence agriculture.

The report indicates the need for a multi-pronged approach to mitigating the growing economic impact of the epidemic involving both governmental and private sector prevention and treatment programmes; community efforts to de-stigmatise the disease; and public campaigns to change behaviour.

Importantly, the study notes that ‘treatment programmes in the workplace … are increasingly seen by a range of enterprises as the least costly option to maintain profitability and ensure growth.’

The ILO report’s conclusions echo the findings of a comprehensive study of the impact of HIV/AIDS on business released in January 2004 jointly by the Bureau of Economic Research and the South African Business Coalition on HIV & AIDS (SABCOHA). Of the 1,006 companies surveyed – in the manufacturing, retail, wholesale, motor trade, building and construction sectors – 9% indicated that the epidemic had already had a significant adverse impact on their business and more than 40% ‘envisage a significant negative impact on their business in five years’ time.’

‘HIV/AIDS is undoubtedly a bottom line issue for business, as it impacts on production costs and consumer markets,’ the report stated.

South Africa: A Snapshot

As the country with the largest number of people living with HIV/AIDS, South Africa graphically illustrates the need for both business and government to effectively fight the epidemic. But only a quarter of the companies surveyed have HIV/AIDS policies in place and only 14% have conducted research to assess the impact of the epidemic on their labour forces.

‘It is vital for companies to bear in mind that sick employees cost the employer money…. Studies have shown that the financial benefits of investment in prevention and treatment programmes will almost certainly exceed the costs,’ the survey concludes.

Small and medium enterprises are particularly vulnerable in countries with high rates of infection, yet seem to be the least poised to confront the problem. Only 13% of smaller companies surveyed have implemented an HIV/AIDS plan, whereas 90% of larger firms have.

The cost of ignoring the problem is high, measured by high labour turnover rates, lower worker productivity and increased burden on employee benefit programmes. Some 30% of companies surveyed also foresaw an adverse impact on consumerism within five years.

‘AIDS deaths will reduce the absolute number of consumers in an economy, which could have a negative effect on total consumption expenditure,’ the SABCOHA survey concludes.