Continental Divide in COVID-19 Unemployment Burden

According to OECD figures, countries in Europe and on the American continent have not felt the burden of rising unemployment during the COVID-19 pandemic equally. Within the OECD, Colombia, Canada and the U.S. saw unemployment grow by upwards of 8 percentage points. European countries – even those hit hard by the virus – saw unemployment rise by less than 1 percent.

According to a report released by the OECD on Tuesday, participation in job retention programs that are part of labor laws in many European nations was high during the pandemic. 55 percent of French dependent employees were part of such schemes, as were 45 percent of those in Switzerland, 45 percent in Italy, 31 percent in the UK and 30 percent in Germany.

Participation in job retention schemes was much lower in Canada and the U.S. (5 percent and 0.1 percent respectively). The Paycheck Protection Program, or PPP, rolled out in the U.S. as part of the coronavirus CARES act, did include the provisions that 75 percent of loans had to be used for payroll and that headcount had to be maintained. Yet, the program is not as wide-reaching as its European counterparts and also lost time on implementation, since it was specifically designed to combat COVID-19 damage to the economy. The program quickly burned through $350 billion until the end of April and, as of June 30, had $130 billion of an additional $300 billion of funding left.