Employment in New Zealand pre-lockdown was sitting at just four per cent. That figure has now risen to around six per cent (higher than in the post-Global Financial Crisis environment) but there are predictions it could rise to as much as 26% once the full impact of the Covid-19 crisis is realised.
There are some predicting three waves of unemployment, too: the first wave (now); then when the wage subsidy ends; then when a global recession hits. Yikes.
But New Zealand’s response to the pandemic has received a fair share of respect from countries around the world, so how do we fare against other major economies in our unemployment statistics thus far? We take a look at five big global economies and how they were faring pre-lockdown, how they’re faring now and what the experts are projecting for their future.
The United States rate of unemployment sits at 4.4% (although the US only categorises someone as unemployed if they are jobless and seeking work) which is a big jump from the 3.5% it recorded pre-coronavirus outbreak. Even though it may seem on a very slight upward trajectory from the start of 2020, the numbers of unemployed have soared to unprecedented heights.
According to Fortune.com, if you combined the 7.1 million unemployed Americans already categorised as unemployed in March and then added the 10 million unemployment claims in the following two weeks, then at the end of March you’re looking at 17 million unemployed Americans. That’s by far the highest number ever recorded. To put that into perspective, there were 14.7 million unemployed recorded in June, 2009, during the Global Financial Crisis.
Some experts say that the unemployment rate will soon be in the double-digits, and the combined problems of some states struggling to process unemployment claims, coupled with the fact that many will only be categorised as unemployed once they start job-seeking, lends a fair bit of weight to this claim.
re-coronavirus China had an unemployment rate of around just 5% of its 1.4 billion citizens. There has been fierce debate over the official unemployment statistics following the outbreak, with the South China Morning Post publishing that Liu Chenjie, chief economist at fund manager Upright Asset stated there may be as many as 205 million Chinese workers who are unable to return to their previous employment.
In China, unemployment data doesn’t take into account migrant workers (whose employment is widely affected by closing borders). Additionally, China’s monthly data only draws from a small sample base of around 120,000 households. This makes it very difficult to know where the true figure sits. The most widely cited figure suggests that unemployment rose to 6.2% in February from 5.2% in December – which means roughly an extra five million people out of work – a huge discrepancy from Liu’s 205 million.
Time will tell what the eventual figure rises to, as the world’s second largest economy will feel the impact of large employers closing over the remainder of 2020.
The Philippines’ unemployment rate, pre-coronavirus was tracking at a steady 5.3% from January 2019 to January 2020. But since the Government announced an Enhanced Community Quarantine (ECQ) it has pushed the Philippines’ unemployment rate to its highest in 13 years.
Japan’s global investment bank Nomura warned this month that based on the recorded 1.04 million Filipinos who reported as unemployed recently, that it estimated the “unemployment rate has already jumped to 7.5 percent after falling to a record-low 4.8 percent last year.”
“This is consistent with our forecast for the unemployment rate to surge to eight percent in Q2, (second quarter) a thirteen-year high,” it added.
Nomura stated that “We believe the DoLE (Department of Labor and Employment) numbers are still likely to rise, as these are based on firms claiming assistance under an amelioration program for those affected by the outbreak.”
The ECQ has been running for around six weeks and is intended to be lifted on April 30 – which is when the impact of the global economic situation will start to show its scope. Industries, such as the BPO sector will likely be further diminished over time as overseas companies that require remote Filipino employees scale back their operations.
Like all of the others, the UK has been left far from unscathed from the impact of weeks of “lockdown”. The unemployment rate, which like the USA includes those jobless in search of work, has doubled from 3.9% in January, to 5.3% mid-March, to 6.6% at the end of March. There have been 1.4 million new claims for benefits since mid-March. This means the 1.3 million unemployed has roughly doubled, which will lift the unemployment rate to roughly 7.9%.
There’s a 45-day lag on the data, so we won’t know about the April figures until mid-June – but the likelihood is there could be a further jump in that 7.9% figure.
Our closest neighbour has seen employment rates rise significantly, despite their softer approach to “lockdown” measures. Perhaps because cafes, retailers, construction and hairdressers are still able to operate, their latest unemployment figures show only a slight increase in unemployment.
The unemployment rate has risen to just 5.2 per cent in March, up from 5.1 per cent in February, and well below economists’ expectations. However, most Australian economists agree that the total of unemployed people could grow up to 12%.
Treasury predicts that the jobless rate will hit 10% by mid-year (meaning 1.4 million Australians will be out of work), which will be the highest unemployment rate in nearly three decades. However, the true impact will not be known until the April data comes in.