European Tribune - Community, Politics & Progress.

Who's sharing the pain?

by Jerome a Paris
Wed Jun 17th, 2009 at 06:58:03 AM EST

Source: BNP Paribas Economic studies
dotted line: unemployment rate in Germany (right-hand scale)
full line: number of part-time workers (thousands, left-hand scale)

We've heard the story of British Airways asking employees to work for one month without getting paid (effectively a 8% wage drop). We've seen unemployment figures go up in all industrialised countries (with the most recent data from the UK hailed as good news because the increase is not as horrible as anticipated). The above graph shows that Germany has, for now, chosen the route of making employees work less, but, as the study where that graph comes from suggests, not reduce their pay by as much (productivity per worker has gone down, and costs per hour worked have shot up), in an exemple of making the pain from the economic crisis fall not only on workers.

How are things in your country? Is unemployment skyrocketing? Why categories of workers are suffering the most? Are working hours down?

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Who's sharing the pain? | 8 comments (8 topical, 0 editorial, 0 hidden)

A US view (none / 1)

Jobless Recovery Redux?
Although the pace of layoffs appears to be subsiding and the overall economy is showing hints of stabilization, most forecasters expect unemployment to continue to increase in coming months and to recede only gradually as recovery takes hold. In this Economic Letter, we evaluate this projection using data on three labor market indicators: worker flows into and out of unemployment; involuntary part-time employment; and temporary layoffs. We pay particular attention to how these indicators compare with data from previous episodes of recession and recovery. Our analysis generally supports projections that labor market weakness will persist, but our findings offer a basis for even greater pessimism about the outlook for the labor market. Specifically, we suggest that the relatively low level of temporary layoffs and high level of involuntary part-time workers make a jobless recovery similar to the one experienced in 1992 a plausible scenario.
(...)
Even more dramatic, however, has been the break from past patterns in the number of workers who are involuntarily employed part-time. Numerous reports tell of workers being furloughed for a set number of days in a month or asked to work fewer hours each day. These anecdotes are supported by the monthly data. Indeed, the number of workers employed part-time against their wishes is at historical highs. The fraction of the labor force that reports working part-time for economic reasons has increased from 3.0% in December 2007 to 5.8% in April 2009. This increase has been broad-based, occurring in a wide range of occupations. Moreover, the reduction in hours has not been trivial, with more than half of such workers experiencing reductions of five hours per week or more.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jun 17th, 2009 at 07:06:26 AM EST

Re: A US view (none / 0)

Jerome a Paris:

a jobless recovery similar to the one experienced in 1992 a plausible scenario.

Nice one, going back to the Bush I/Clinton years rather than to the Buss II jobless recovery of the 2000's

The interesting thing is that the last three recessions (1990-1, 2001 and the current one) have been followed by jobless recovery in the US...

The brainless should not be in banking. — Willem Buiter

by Migeru (migeru at eurotrib dot com) on Wed Jun 17th, 2009 at 07:15:14 AM EST
[ Parent ]

well, we don't know about this one yet... (4.00 / 2)

but the comparison to 1991 is not wrong, as it was the first "recovery" with so little job creation.

The difference in this case is not the recovery will be jobless, it is also that the recession is already a lot deeper than it was in 1991, and will get still worse.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jun 17th, 2009 at 07:38:02 AM EST
[ Parent ]

Re: well, we don't know about this one yet... (none / 1)

What defines a "recovery", if it is possible to have one with (relatively) high unemployment?

The brainless should not be in banking. — Willem Buiter

by Migeru (migeru at eurotrib dot com) on Wed Jun 17th, 2009 at 10:13:40 AM EST
[ Parent ]

Re: well, we don't know about this one yet... (4.00 / 2)

(relatively) high profits.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jun 17th, 2009 at 10:19:01 AM EST
[ Parent ]

recovery (none / 0)

means higher GDP:

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jun 17th, 2009 at 10:22:10 AM EST
[ Parent ]

Re: Who's sharing the pain? (4.00 / 2)

Time to bite the bullet and reduce the full-time workweek to 35h?

The brainless should not be in banking. — Willem Buiter

by Migeru (migeru at eurotrib dot com) on Wed Jun 17th, 2009 at 07:16:43 AM EST

Well (none / 1)

As I reported yesterday, the Dutch CPB (the government's number cruncher) expects the world trade to shrink with 15,25% - which has dire consequences for export nations, such as Germany, and transfer nations, such as the Netherlands.

It projects 9.5 % unemployed of the working population in 2010. Due to decreased inflation because of the lowered oil price, spending power is up, but people are saving.

Press release in Dutch here.

Government debt in 2008 is up with some 85 billion (dominantly because of the purchase of Fortis bank last year).

by Nomad on Wed Jun 17th, 2009 at 07:54:53 AM EST

Who's sharing the pain? | 8 comments (8 topical, 0 editorial, 0 hidden)

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