European Union statistics office Eurostat said on Wednesday that the EU unemployment rate rose from 6.4% in April to 6.6% in March.
Job losses are not evenly distributed across all EU countries. The unemployment rate in Spain, hit hard by the coronavirus, rose from 14.2% in the previous month to 14.8%. According to Eurostat, Germany kept the unemployment rate constant at 3.5%.
Economists partially credit for adhering to short-term work programs; this encourages struggling employees to retain employees, but reduces working hours. He then subsidizes some of the state salaries. For example, in Germany, the government covers 60% to 67% of the wages of non-working hours.
“Short-term work plans are incredibly effective in alleviating the first impact of the economic crisis,” Dutch Bank ING senior euro zone economist Bert Colijn said on Wednesday.
According to a study by the European Union Institute, at the end of April, businesses in the European Union made nearly 42 million applications to support workers through short-term work programs. This is equivalent to about 27% of all EU employees.
However, UBS economist Anna Titareva said labor market surveys may not fully capture the damage done to EU workers. The survey surprisingly shows that unemployment in Italy fell from 8% to 6.3% in March.
“It seems that some people who lost their jobs after the mobility restrictions were introduced are not considered unemployed,” Titareva said in a research note. Said.
In order to be considered unemployed for the EU survey, one should be actively looking for work and be ready to start a new job in the next two weeks. Titareva said restrictions on movement or ongoing childcare needs could force people to seek work.
Progress depends largely on the duration and scale of the economic downturn. Europe’s short-term work programs work well as well as stopping space measures, but can only be used temporarily.
“Since recovery will likely continue for a long time, unemployment will rise significantly, but short-term work will help outputs recover faster when demand returns,” Colijn said. Said.
Correction: An earlier version of this story misspelled the month when US unemployment reached 14.7%.