Pandemic deepens inequality as lower-income workers feel the brunt of Covid crisis
Companies are hiring and unemployment is falling across most advanced economies on hopes that vaccines will eventually contain the Covid-19 . But not every job is coming back.
The pandemic has pushed out older employees and is deepening inequality as lower-income workers feel the brunt of the crisis. Economists warn that there’s still a way to go before global employment is back to where it was before the pandemic.
Here’s a snapshot of the jobs recovery in some of the biggest advanced economies:
A resurgent US job market is creating more opportunities at a faster clip than many economists and employers expected. Non-farm payrolls rose by 916,000 in March, blowing away economists’ median estimate of a 660,000-job gain.
But there are gaps. There are still nearly two million fewer US women in the labour force than before Covid.
Black women in particular are falling behind other groups in job gains. Bloomberg Economics sees US unemployment dropping below 6pc in the current quarter then heading toward 5.1pc in the fourth quarter before falling to 4pc at the end of 2022.
The proportion of available jobs in Japan is still sharply down from pre-pandemic levels, reflecting weak hiring in hotels, restaurants and bars. The unemployed are outnumbered by people furloughed or on leave, and the number leaving the working force altogether is rising.
Bloomberg Economics expects Japan’s jobless rate to rise to around 3.0pc in the second quarter as renewed virus-containment measures hits the services sector.
German employment has been more resilient than in other European countries due to a greater reliance of the economy on manufacturing even as thousands of businesses remain affected by recently extended pandemic restrictions. Yet many businesses are strained by nearly six months of lockdowns, and the labour market has a long way to go before a full recovery. Bloomberg Economics expects Germany’s unemployment rate to fall to 4.2pc in the fourth quarter and to be at 4pc at the end of 2022.
The UK labour market weakened unexpectedly in March as company payrolls fell for the first time in four months and more people dropped out of the workforce.
Long-term youth unemployment has been highlighted as a particular concern. Overall employment remains about 800,000 below where it was before the pandemic struck. Bloomberg Economics expects UK unemployment to peak at 6pc in the fourth quarter before declining to 4.8pc in the final quarter of 2022.
Australia is one of the first nations to regain all jobs lost through the pandemic, reflecting a successful early suppression of Covid-19 and a massive fiscal-monetary shot that has sent the economy roaring back. Participation is at record highs and the unemployment rate is moving quickly in the right direction.
But wages growth is sluggish and while underemployment has fallen, there’s plenty of people that want additional hours.
Bloomberg Economics expects the decline in Australia’s unemployment rate will slow over the second half of 2021 and does not see the unemployment rate dipping below 5pc until 2024.
“The beginning of a rapid recovery in the US, and furlough schemes keeping workers attached to jobs in Europe, mean the labour market landscape is not as bleak as it could be,” said Tom Orlik, chief economist of Bloomberg Economics.
“Still, with the pandemic accelerating the ‘Amazon-effect’ shift from small, labour-intensive firms to their bigger, tech-savvy rivals, the path back to full employment will be arduous.”