Employment in OECD countries drops in Q1 for the first time since 2013
Unemployment is expected to rise to 9.4% this year, up from 5.3% in 2019, if the Covid-19 outbreak is kept under control
Employment in some of the world's biggest economies dipped in the first quarter of 2020, with young people the most affected, according to the Organisation for Economic Co-operation and Development (OECD).
The employment rate, defined as the number of working-age people with jobs, fell to 68.6 per cent in the first three months of the year, compared to 68.9 per cent in the previous quarter among the OECD's 37-member countries, the Paris-based organisation said in a report on Thursday.
The OECD employment rates for women and men decreased at the same pace, to 61.3 per cent and 76.1 per cent respectively, the report showed. However, young people fared worse with the employment rate among youth aged 15 to 24 falling to 41.9 per cent, from 42.3 per cent.
In June, the OECD said it expects the world economy to shrink 6 per cent this year before growing 5.2 per cent in 2021, if the coronavirus is contained. In the event of a second wave of infections, the world economy may contract 7.6 per cent before growing by 2.8 per cent next year.
Data on employment rates in the second quarter paint a gloomy picture in the US and Canada, showing a deeper plunge in the number of people with jobs compared to the first quarter.
The employment rate in the US fell nearly 9 percentage points to 62.6 per cent in the second quarter, making it the lowest on record since the fourth quarter of 1998.
The US youth employment rate was particularly affected, dropping by more than 12 percentage points to 38.6 per cent, compared with their older peers. US workers aged 25 to 54 saw employment drop to 71.5 per cent from 80.1 per cent while those between 55 to 64 years saw a fall to 57 per cent from 63.5 per cent.
During the second quarter, the number of persons in temporary lay-off in the United States reached 18.1 million in April, before decreasing to 10.6 million in June, according to the report.
Similarly, in Canada, the employment rate fell to 64.7 per cent in the second quarter from 73.2 per cent in the first quarter.
Among OECD countries with monthly labour force surveys, over April and May, the employment rate fell by a total of 10.3 percentage points in Colombia to 50.6 per cent. In Australia, employment fell by 4.7 percentage points to 69.8 per cent.
The decrease was lower in Japan, down by 1 percentage point to 76.9 per cent, while employment in Korea fell by 0.4 percentage points, to 65.4 per cent.
The impact of Covid-19 on the workforce of OECD economies is 10 times larger than during the first three months of the 2008 financial crisis, the Paris-based organisation said in its employment outlook report on July 7.
Unemployment in the OECD countries is expected to rise to 9.4 per cent this year, up from 5.3 per cent in 2019, if the outbreak is kept under control, the organisation said in its latest employment outlook report on July 7.
Even then, it remains the worst unemployment figure since the Great Depression and could increase to 12.6 per cent this year if there is a second wave of infections.
Updated: July 16, 2020 03:14 PM