In a lengthy article on economic prospects in Europe in the wake of the coronavirus crisis, the New York Times writes, with half-concealed glee, about a tsunami of job cuts about to hit the continent.
Citing a study by McKinsey and Company, the Times says that as many as 59 million jobs are at risk of cuts in pay or permanent lay-offs, especially in retail and transportation.
While the main message of the article is that Europe has delayed, rather than avoided, a major economic meltdown, there is no doubt a great deal of substance to the theses that the pandemic has brought forward a shakeout in the jobs market that was due to come later, rather than sooner, had it not been for coronavirus.
Many employees whose salaries have been subsidised in recent months are working in so-called zombie jobs, according to the German bank Allianz. These include jobs in the restaurant and hotels sector, shops, and the automotive and airline industries, all of which are slow to adapt to changes in consumer attitudes.
Simon Tilford, an author of a Centre for European Reform report on the economic risks of the pandemic, underlines the significance of structural change precipitated by the coronavirus crisis: “Lots of companies will lay off workers irrespective of whether they can continue to access wage subsidy schemes because they can’t see demand recovering anytime soon.”
Governments are going to face a difficult choice about continuing to subsidise workers in sectors where there is a question about the long-term future, he added.
PHOTO: Bank of Ireland plans to cut 1,400 jobs Reuters