Worth Reading

COVID-19 is causing activity to collapse and unemployment to soar, declares OECD

As the effects of the pandemic and containment measures hit OECD economies, millions of people have been unable to go to work, resulting in an exceptionally stark drop-in activity and unprecedented job losses. Up to 10 times fewer hours were worked in some countries, compared with the first few first months of the 2008 financial crisis.

While millions have been furloughed or moved onto reduced hours, millions of others have lost their jobs entirely, with little improvement in sight.

Unemployment will remain high into 2021

Unemployment is projected to reach nearly 10% in OECD countries by the end of 2020, up from 5.3 % at year-end 2019, and to go as high as 12 % should a second pandemic wave hit. A jobs recovery is not expected until after 2021.

Whether because of higher unemployment or people working fewer hours, the impact of the pandemic on jobs has not been felt to the same extent in all countries.

Some countries hit worse than others

In some countries, employers used job retention programmes to cut hours while allowing workers to keep their pay and jobs; there, it is likely that the full impact of the pandemic is yet to be felt. In others, there have been unprecedented leaps in unemployment, but many workers will return to their jobs (or to new ones) as economies re-open and activity picks up.

Young people and women hit hard by jobs crisis

The COVID-19 crisis is having a greater impact on some workers than others. Young people and women are among those at greatest risk of joblessness and poverty. They generally have less secure, unskilled jobs and are highly represented among workers in industries most affected by the crisis, such as tourism and restaurants.

Saving jobs, supporting workers

Many countries are using job retention programmes to help keep workers employed and save viable jobs. These include measures that directly subsidise hours not worked, such as Germany’s Kurzarbeit or France’s Activité partielle, as well as measures that also top up the earnings of workers on reduced hours, such as The Netherland’s NOW (Noodmatregel Overbrugging Werkgelegenheid) or the Job Keeper Payment in Australia. About 60  million people across the OECD have been included in company claims for such programmes.

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OECD Employment Outlook 2020

The 2020 edition of the OECD Employment Outlook focuses on worker security and the COVID-19 crisis. It provides an initial assessment of the labour market consequences of the COVID-19 outbreak and the resulting economic crisis. It also presents an overview of the emergency labour market and social policy measures implemented by OECD countries and discusses directions for further policy adaptation as countries move out of lockdown.

The entire Report can be read here