Employees are losing their jobs at a terrifying rate as countries put their businesses into deep-freeze to combat the Covid-19 pandemic.
In the US alone, almost ten million people have now filed for unemployment benefits in the last two weeks. The latest figures published today show that more than 6.65 million people registered for benefits in this last week. That’s more people claiming than in the last 10 months.
The US is now facing the steepest rise in unemployment in its history as swathes of the country’s biggest companies from airlines to restaurants are closing down. Before last week’s figures, the sharpest rise in unemployment claims was in 1982 when the numbers of unemployed rose by 695,000.
All 50 states reported a rise in unemployment claims with the biggest jumps in Pennsylvania, Ohio and Massachusetts. Texas has also been hit hard, with the numbers of people registering soaring by 600% over the last month.
Oil and gas companies have seen some of the most severe cuts to their workforce following the oil price collapse and lower demand. No industry has escaped the impact of the lockdown from the biggest companies – such General Electric – laying off thousands of workers to entertainment and leisure companies.
William Rodgers, ex-chief economist at the US Department of Labor, said: “We are at the mercy of the virus.” Rodgers estimates that US unemployment – which was just 3.5% in February – has reached 17% in two weeks. The unemployment rates is particularly high for African Americans, rising to 19% over the last two weeks from 5.8%.
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The outlook is likely to be even worse on Friday when the government publishes its updated jobs report for March. But most analysts say it’s the April figures which will show the depth of the crisis, as there are still huge backlogs in the system.
There is some hope that the $2 trillion US relief package, which was passed late last week, will help stave off too many more job cuts by offering companies support to furlough workers.
There has also been a huge spike in the number of workers applying for unemployment benefits in the UK. Nearly a million people applied for benefits between March 16 and the end of the month, and thousands more are expected to register over the next few weeks as more companies lay off workers. In normal times, the Department for Work and Pension would expect around 100,000 claims in a two week period.
Soaring job losses are being seen across Europe, particularly in Italy and Spain where the impact of the virus has been devastating. Even the continent’s richest countries such as Norway have not escaped. Over the last two weeks, the number of Norwegians applying for unemployment benefits has risen by almost 350% as companies were forced to close down in one of Europe’s toughest lockdowns. Unemployment is now 10.4%, higher than at anytime since the 1930s.