'25 Million+α' COVID-19-Induced Unemployment Fear Strikes Global Economy

ILO Predicts Over 25 Million Unemployed
US Records Highest Unemployment Claims in History
Ireland Warns of Sharp Unemployment Spike in 3 Months
Actual Job Losses Unestimable Amid Global Stay-at-Home Orders Shock

[Asia Economy Reporter Naju-seok] The fear of unemployment caused by the novel coronavirus infection (COVID-19) is spreading worldwide. In the United States, nearly 4 million unemployment benefit claims, the highest ever, have surged, and concerns have arisen in Ireland that the unemployment rate could increase fourfold. The International Labour Organization (ILO) predicted that the number of unemployed people worldwide will exceed 25 million.

According to major foreign media on the 26th (local time), the ILO forecasted that this crisis could surpass the mass unemployment shock during the financial crisis. During the financial crisis, 22 million people worldwide lost their jobs due to recession and other factors, but this time, it is highly likely to be '25 million plus α.' An ILO official said, "The number of cases temporarily losing jobs is higher than expected," adding, "We believe it will far exceed 25 million."

In a report released on the 18th, the ILO projected that if the global gross domestic product (GDP) decreases by 4%, up to 24.7 million people could become unemployed, and if it decreases by 8%, up to 36 million people could lose their jobs. The official's remarks indicate that the ILO's unemployment forecast is approaching the worst-case scenario.

The unemployment situations in various countries also align with these projections. In the United States, due to stay-at-home orders in states like New York and cash shortages in companies, cases of employees quitting or taking leave have continued, causing unemployment benefit claims to soar to 3.283 million in the third week of this month (15th?21st). The Wall Street Journal (WSJ) declared, "The longest period of job creation in the U.S. since the global financial crisis is over."

The threat of unemployment felt by Americans is even more severe. According to a poll by The Washington Post (WP) and ABC News, 33% of respondents said that they or close family members have lost their jobs. Among those who answered that neither they nor their family members have lost jobs yet, half expressed concerns about losing jobs in the future. James Bullard, President of the Federal Reserve Bank of St. Louis, also warned that up to 46 million people in the U.S. could lose their jobs in the short term.

Unemployment is occurring in European and Asian countries as well. In Ireland, the Economic and Social Research Institute (ESRI) forecasted that the unemployment rate, which was 4.8% last month, could reach 18% by June. The institute stated, "Ireland created 330,000 new jobs over the past five years, but due to COVID-19, 250,000 to 330,000 jobs will disappear."

According to the French Ministry of Labor, 100,000 companies have requested wage support for 1.2 million employees. This is to support salaries for employees who have entered reduced working hours or paid leave.

Poor people in India standing in line to receive food rations [Image source=AP Yonhap News]

As countries worldwide implement unprecedented lockdown measures, the scale of short-term unemployment is impossible to estimate. For example, India, with a population of 1.3 billion, declared a 21-day lockdown, causing 120 million daily wage workers who had moved to cities in search of jobs to face a survival crisis due to lack of income. Foreign media reported that those unable to find jobs are walking hundreds of kilometers to return to their hometowns. The Indian travel and service industries expect 38 million job losses.

China's employment situation is also in total disarray. Dan Wang, an analyst at the Economist Intelligence Unit, warned that 9 million people in Chinese cities could lose their jobs due to the impact of COVID-19.

This content was produced with the assistance of AI translation services.