According to McKinsey, nearly 60 million jobs across the European Union and the United Kingdom are at risk from the coronavirus or cOVID 19 pandemic. The consulting firm warns in a report published on Monday that the European Union unemployment rate could soar from around 6% to more than 11% and remain elevated for years if this deadly disease is not quickly contained.
McKinsey estimates that one in four jobs across the European Union and the United Kingdom are at risk of a reduction in hours or pay, temporary furloughs or permanent layoffs. The professions that do not require close contact with others, including accountants and architects, are considered low risk, along with those that provide essential services such as police.
There are some 55 million workers are employed in high-risk professions, including retail cashiers, cooks, construction workers, hotel staff and actors. Roughly 80% of jobs considered at risk are held by people who do not have a college degree, with employees of smaller companies in particular danger.
Under a scenario in which Europe fails to contain the virus within three months and is forced to continue social distancing measures through the summer, the EU unemployment rate will peak at 11.2% in 2021, with a full recovery unlikely until 2024.
It has already seen that British Airways has reached an agreement with the U.K. trade union Unite to furlough staff without anyone being made redundant. The flagship U.K. airline’s agreement reportedly entails suspending 80% of its cabin crew, engineers, ground staff and head office employees. The news comes amid the worsening coronavirus crisis, which has halted the majority of passenger travel globally and delivered a crippling blow to the airline industry.
While on the contrary in hospitality sector, Marriott International Inc., the world’s largest hotel company, and a growing number of hotel owners are furloughing tens of thousands of workers throughout the world or slashing staff in an effort to steer their companies.
McKinsey said that the business and governments need to move quickly to safeguard jobs. Companies should cut costs, separate work shifts and enable remote working where possible. Governments should provide loan guarantees, tax relief and guarantee pay for workers, some of which is already being done across Europe.
The United Kingdom is covering more than 80% of worker salaries for at least the next three months up to a maximum of £2,500 ($2,900) a month.
Germany and France have similar programs in place. The European Union’s coronavirus relief package includes up to €100 billion ($110 billion) in wage subsidies aimed at preventing mass layoffs, as well as hundreds of billions in loans to businesses and credit for EU governments.
In McKinsey report it also says that the safeguarding jobs at risk in otherwise healthy, productive enterprises is imperative; losing those jobs would not only be a tragedy on an individual level, but would also be very painful from an economic perspective.
Tags: Europe, European Union
