Fra ABNamro:
Europe’s hidden unemployment
Euro Macro: Short-term work schemes still widely used after the end of lockdowns – Germany’s Ifo Institute and France’s DARES have published recent data on the use of short-term work schemes (STW). STW schemes are designed to allow companies to temporarily reduce the number of working hours of employees (often to zero) while keeping them on the payroll. The government reimburses the companies what they have paid to these employees, which often is around 70-80% of their normal hourly pay.
In Germany, the easing of lock-down measures since early May has resulted in a drop in the number of people working in STW (called Kurzarbeit) from a peak level of 7.3 million people in May, down to 4.6 million in August. As a share of total employment, the percentage of employees working in STW fell from a peak level of 21.7% in May, down to a still very high 14% in August.
In France, where the lockdown measures were stricter than in Germany and prohibited a larger share of employees from coming to the work place during the Covid-19 crisis, the number of people in STW (called acitivité partielle or chômage partiel) peaked at almost 9 million in April, and subsequently fell to 2.4 million in July. As a share of total employment it fell from more than a third of all employed persons in April, down to around 9% in July. France’s DARES also publishes the number of employees in STW in full time equivalents, which was equal to around 4% of employment in July. According to the statistical methodology used by the statistical bureaus in the eurozone all persons working in STW are registered as being employed.
Despite the wide use of STW employment in Germany as well as in France declined during the first two quarters of this year. In Germany almost 600 thousand jobs were lost in total (employment -1.3%) and in France almost 800 thousand jobs (employment -2.8%) between 2020Q2 and 2019Q4.
