- The Organisation for Economic Co-operation and Development said that by one metric the employment crunch triggered by coronavirus has been 10 times worse than what was seen during the 2008 financial crisis.
- For its 37 member countries, the OECD said that the unemployment rate – the percentage of the labour force that is out of work – dropped to 8.4% in May 2020, down from a 10-year high of 8.5% in April.
- If a second wave of infections were to hit the world, there could be a fresh spike in unemployment which would take the rate to 12% in the developed world, an OECD report said.
- That would represent around 80 million people unemployed, about the population of Germany.
- Visit Business Insider’s homepage for more stories.
A second wave of coronavirus infections around the world could leave 80 million people in the world’s developed nations in unemployment, according to the latest report from the Organisation for Economic Cooperation.
For its 37 member countries, the OECD said that the unemployment rate – the percentage of the labour force that is out of work – dropped to 8.4% in May 2020, down from a 10-year high of 8.5% in April.
More brutally, the unemployment rate for the US stood at 11.1%.
The inter-governmental organisation highlighted that the current impact on jobs has been 10 times higher than the effect seen during the global financial crisis between 2007-08.
“Up to 10 times fewer hours were worked in some countries, compared with the first few first months of the 2008 financial crisis,” the report noted.
“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,” OECD said in a statement.
The total workforce of the 37 members of the group is some 666 million people, meaning that a 12% unemployment rate would leave just shy of 80 million people out of work. 80 million is roughly the population of countries like Germany, Turkey, and Iran.
“A jobs recovery is not expected until after 2021,” the report added.
The organisation said its latest numbers were “stark,” its projections “bleak,” and it underlined the possibility of a “double-hit” scenario in its economic forecasts.
That double hit would see unemployment rates decline a little, before spiking again during a second wave of infections and renewed lockdown measures.
You can see the forecast in the chart below:
2020 graduates face dim job and internship prospects in the short run while their older peers face the second heavy crisis in their “still young” careers, the report said, and highlighted that women are more greatly impacted by rising unemployment than men.
However, the report also highlighted that strict confinement measures helped many countries contain their number of fatalities.
Enhancing personal hygiene measures, ensuring use of masks, and continuous enforcement of physical distancing policies such as banning large gatherings and encouraging working from home to continue could minimise risks of a second wave, it said.
“Countries can prevent a second pandemic wave, and a consequent lockdown, if they implement comprehensive packages of public health interventions to contain the spread of the infection until a vaccine or effective treatment become available,” OECD said.
The organisation forecasts a 7.3% contraction for US real GDP in 2020 with a 4.1% rebound in 2021.
In case of a major second wave, US real GDP will contract by 8.5% in 2020 with a muted rebound of just 1.9% in 2021.