Job market faces great challenges

Monday, 2020-09-07 17:00:28
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Office workers wearing protective face masks walk to head home at sunset amid the COVID-19 outbreak, in Tokyo, Japan, June 9, 2020. (Photo: Reuters)
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NDO – Job creation is one of the top priorities in the economic recovery efforts of countries, with as the unemployment rates in many countries falling to the lowest level in years. Job support packages have been launched by governments with the hope of creating “life buoys” for workers in crisis. However, stabilising the job market is still a difficult problem.

Job growth in the US slowed in August due to the expiration of the government’s financial support package, threatening the recovery of the world's number one economy during a recession caused by the COVID-19 epidemic.

Although the unemployment rate dropped to 8.4%, better than the figure of 10.2% in July, the US still saw the loss of 11.5 million jobs (equivalent to 7.6% of its workforce), compared with the pre-pandemic period. Economic experts have warned that the recovery of the US economy is declining rapidly and around 50% of the lost jobs have yet to be restored. US companies have had to cut tens of millions of employees because the blockade forced many companies to temporarily shut down.

According to the US Department of Labor, although the number of people applying for unemployment benefits decreased after peaking in August, there were still nearly a million people filing for unemployment benefits each week. President Donald Trump has recently vowed to create 10 million jobs in 10 months. The US Federal Reserve (FED) is ready to use a series of tools to support the economy, including changing policies to allow the economy to create more jobs.

The Eurozone’s recovery slowed down in August. According to INSEE, the unemployment rate in France in the second quarter fell to its lowest level in 37 years. Prioritising restarting the economy and preventing unemployment, the French government has announced a 100-billion-euro support package, hoping to help create 160,000 jobs by 2021.

The Institution of Social Insurance in Italy said in the first five months of 2020, Italy lost more than 700,000 jobs, as the number of new recruits in the private sector from January to May decreased by 43% compared to the same period in 2019.

In the UK, more than half of the people working in the arts and entertainment fields have lost their jobs. 23% of firms in this sector are reporting a severe to moderate risk of insolvency, compared with 11% in all other industries.

As one of the countries most heavily affected by the COVID-19 epidemic in Latin America, the Chilean economy is forecast to decline 7.5% in 2020. The unemployment rate has risen to 13.1%, the highest level in Chile since 2010, meaning more than a million people are unemployed, according to the National Statistics Institute of Chile. That does not include the 760,000 people who were eligible for an initiative launched by the government in March to protect affected jobs during the outbreak of the epidemic. The Chilean Finance Minister called on the National Congress to ratify laws aimed at re-activating the economy by creating jobs.

Governments in the Asia-Pacific region are also working to create jobs for young people, in order to reduce the negative risk to the future of more than 660 million young people in the region. Australian Prime Minister S. Morrison said overhauling the skills system will be a priority to stimulate job creation in a changing labour market.

Meanwhile, the Singaporean President has announced that employment would be the country's priority in the coming years. About US$5.8 billion will be “pumped” into the labour market to support companies to maintain jobs, create new jobs and seize on the growth opportunities of the economy.

The “dark picture” of the job market is reflecting the “health” of the world economy that is continuing to suffer from the pandemic.