“Europe has succeeded in mitigating the initial effects of the crisis,” said John Hurley, director of research at Eurofound, the research arm of the European Union. “But in all likelihood unemployment will come home to roost, especially when generous leave programs start to subside,” he said.
“There’s going to be a jerk,” he added, “and it’s going to be pretty ugly.
Compared with the United States, which lost more than 20 million jobs in April alone, the European Union’s leave programs have kept unemployment off the charts. Germany, France, Denmark and Great Britain are among the countries that have used short-time working schemes, effectively nationalizing paychecks around 60 million private sector employees.
But even before a recent resurgence in coronavirus cases, the economic damage from the pandemic was increasing, and it now appears that these expensive government programs have only delayed the pain of some workers. Corporate giants and retail businesses operating well below capacity since the onset of the crisis will now look to shedding tens of thousands of jobs in the fall and next year. Some companies believe the disruption is the best time to move forward with a long-envisioned downsizing.
Airbus, BP, Renault, Lufthansa, Air France, the Debenhams department store chain, Bank of Ireland, retailer WH Smith and even McLaren Group, which includes the Formula 1 racing team, as well as countless small businesses, are among those who plan cuts that will drag well-paid factory workers, retail workers and white-collar workers into the ranks of the unemployed.