McKinsey Warns "60 Million Could Be Laid Off in Europe"... Impact of COVID-19 Highlighted

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[Asia Economy Reporter Hyunwoo Lee] Due to the impact of the novel coronavirus infection (COVID-19), it is projected that the number of unemployed people in the European Union (EU) could increase by nearly 60 million. In particular, it is expected that many jobs of blue-collar workers such as construction workers and food service workers, as well as low-educated workers, will disappear, prompting calls for governments and companies in each country to take swift action.

According to CNN on the 19th (local time), global consulting group McKinsey stated in a report that due to the impact of COVID-19, the unemployment rate in the EU region could surge from the current 6% range to over 11%, and about 60 million part-time workers, which is approximately 25% of all jobs in the EU and the UK, are at risk of permanent layoffs. McKinsey said, "If the COVID-19 situation in Europe is not resolved within three months and lockdown measures continue throughout the summer, the EU unemployment rate will peak at 11.2% in 2021," adding, "Employment recovery will be difficult until 2024," expressing a pessimistic outlook.

Even under an optimistic scenario assuming COVID-19 is smoothly managed, the unemployment rate in the EU region could rise to 7.6% this year, and it is expected to return to normal levels from the fourth quarter of next year. Before the COVID-19 outbreak fully began, the EU unemployment rate in February was 6.5%, the lowest level in about 20 years, with the number of unemployed people estimated at approximately 14 million.

McKinsey analyzed that "more than 55 million jobs of simple labor workers such as construction workers, hotel staff, and retail employees will be lost, and among these workers with unstable employment, over 80% are low-educated personnel without a university degree, making reemployment more difficult after layoffs." McKinsey pointed out that governments and companies need to respond quickly to prevent such a massive unemployment crisis.

Globally, concerns about mass unemployment due to COVID-19 are spreading. In particular, in the United States, since the third week of March, the number of unemployment benefit claims has exceeded 22 million, leading to pessimistic forecasts that the unemployment rate in the U.S. could reach as high as 20%.

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