The COVID-19 pandemic is turning into a jobs crisis far worse than the 2008 crisis. Women, young people and workers on low incomes are being hit hardest, according to a new OECD report and unemployment statistics released today.
The OECD unemployment rate edged down to 8.4% in May 2020, after an unprecedented increase of 3.0 percentage points in April, to 8.5%, the highest unemployment rate in a decade. In February 2020, it was at 5.2%. The number of unemployed people in the OECD area stood at 54.5 million in May. The lack of variation between April and May is the result of contrasting trends. On the one hand, in the United States, as the economy started to re-open, many furloughed workers went back to work, even as other temporary layoffs became permanent. On the other hand, unemployment is increasing or risks becoming entrenched in many other countries.
The OECD Employment Outlook 2020 says that, even in the more optimistic scenario for the evolution of the pandemic, the OECD-wide unemployment rate may reach 9.4% in the fourth quarter of 2020, exceeding all the peaks since the Great Depression. Average employment in 2020 is projected to be between 4.1% and 5% lower than in 2019. The share of people in work is expected still to be below pre-crisis levels even at the end of 2021.
The Covid-19 pandemic has hit hard, especially for youth, low-income households, women, low-skilled workers, part-time or temporary workers, and the self-employed. Many countries are now taking unprecedented measures to extend safety nets, but as confinement measures begin to ease and economies re-open, they should ensure that support continues to reach the most vulnerable.
Two scenarios are probable: either a second outbreak is avoided, with global GDP almost regaining its pre-crisis level by end 2021, or a second COVID-19 outbreak occurs in most economies before the end of 2020, leading to global GDP remaining well short of pre-crisis levels by end 2021.
The race is on to find a vaccine and treatments for Covid-19. Early efforts have shown promise, but there are many issues to address: ensuring international co-ordination, R&D, eventual manufacturing and, crucially, equitable distribution. Meanwhile, measures such as social distancing, masks, good hygiene, and “test, track and trace” strategies, offer effective ways to slow the virus’ spread.
This new series brings together data, analysis and recommendations on a range of topics to address the emerging health, economic and societal crisis. These responses provide guidance on the short-term measures needed in affected sectors, with a specific focus on the vulnerable sectors of society and the economy. Beyond immediate responses, they also aim to provide analysis on the longer-term consequences and impacts of COVID-19, paving the way to recovery with co-ordinated policy responses across countries.
Domestic tourism represents about 75% of the tourism economy in OECD countries. In many countries, domestic tourism activities are restarting, and many countries are focussing demand side measures on so-called ‘staycations’, promoting domestic travel and catering to visitors from their own country in the first instance. But domestic tourism will not be enough to compensate for the shock to international tourism. Countries where domestic tourism already represents a significant share of the tourism economy are therefore likely to see a quicker recovery than those heavily dependent on international tourism. See also: Tourism Policy Responses to the coronavirus (COVID-19).
What are countries doing to contain the spread of the coronavirus?
How are countries helping people, small businesses and the economy to weather the crisis and beyond?
This Country Policy Tracker helps you to navigate the global response.
