Unemployment in Italy and the USA increases dramatically

Closed business in the United States

Since the start of the corona crisis, over 26 million US workers have registered as unemployed.

(Photo: AP)

Rome, Washington Not only in Germany, but also in the United States and Italy, the dramatic consequences of corona-related restrictions on the labor market are becoming increasingly important. The United States saw another surge in unemployment claims last week.

According to figures released by the U.S. Department of Labor on Thursday, between April 11 and April 18, 4.4 million citizens applied for unemployment benefits. That is slightly less than the previous week, when 5.2 million applications were received. Overall, however, the historic downturn in the US labor market continues.

Until the start of the corona lockdown in mid-March, the US was practically fully employed. Since then, 26.5 million US workers have registered as unemployed. That corresponds to about ten percent of all workers there.

The unemployment rate for April, which will only be released in the United States on May 8, is estimated by experts to be around 15 percent. The Oxford Economics research institute calculates that the corona pandemic in the United States will lose a total of just under 28 million jobs. For comparison: The recession after the financial crisis in 2008 only destroyed about nine million jobs in the United States.

Registration for unemployment benefits in the United States is also likely to be particularly high because the US government has expanded claims to support in response to the corona shock.

American unemployed people now receive a fixed flat-rate payment of $ 600 a week from the federal budget, in addition to the unemployment benefit of a few hundred dollars a month, which varies from state to state.

For some low-skilled workers, government support is higher than their previous salary. For the first time, solo self-employed persons from the so-called gig economy are entitled to unemployment benefits.

This means that more redundant workers than before have an incentive to actually register as unemployed. However, those who quit on their own initiative or fly out due to their behavior generally have no claim to unemployment benefits in the United States.

Situation in Italy

In Italy, fear of corona-related unemployment is now almost as great as that of the virus itself. According to a survey conducted by the Tecnè research institute on Tuesday, 54 percent of Italians are afraid of losing their jobs, including civil servants . Meanwhile, 62 percent of the population fear the corona virus.

In Italy, not only is the number of corona deaths still highest in Europe, the economic consequences of the crisis are also the most dramatic. With only a few exceptions, production in the country already stops in the fifth week. There will only be easing from May 4. The International Monetary Fund therefore expects Italian economic output to decline by 9.1 percent in 2020.

In its “Global Outlook” for Italy, the rating agency Fitch estimates that the unemployment rate, which was ten percent in 2019, will rise to 12.1 percent this year and will only decrease slightly to 11.8 percent by the end of 2021.

The Italian statistics office Istat only published the unemployment rate for February at the beginning of April, a decrease to 9.7 percent was reported. But that was before the escalation of the Corona pandemic in Italy. It is only at the beginning of May that the March figures will show the true extent of the corona crisis on the labor market.

More: How are different countries and systems doing in the corona crisis? While European countries are at the top, China and the USA are lagging behind.

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