The latest unemployment number, just released, breaks the three percent barrier for the first time since the pandemic started. The average for the last three months of the year was 3.1 per cent, a value not seen since 2009 in the wake of the financial crisis.
Indeed, the rate for the residents is higher. As a rule, unemployment is not an option for non-residents. Therefore, in the same period, the locals’ unemployment rate was a whole one percentage point above overall value.
The rise in underemployment figures was more visible. For both overall and residents’ figures, it went from values around 0.5 per cent in 2019 to values hovering between four and five percent in 2021.
Still, these figures appear smaller than what one might expect given the depth of the contraction in the last two years and the feebleness of the recovery. In the earlier times of the pandemic, there was a (perhaps too) limited impact on the unemployment figures. Several reasons might help explain that.
First, part of the shock was absorbed by non-residents. They were either in the first line of dismissal or, being away at the time, prevented from returning. Then, several approaches short of firing were used: lay-offs, compulsory holidays, reduced working times (and remuneration). The statistics are not designed to capture those somewhat ‘non-standard’ situations.
As time passes and the activity stays far from pre-pandemic levels, some of those situations will become unsustainable, which will start to show in the statistics. The combined value of the unemployment and under-employment rates was reaching nine percent in the second half of 2021, almost triple the level in 2019.
At the same time, the total number of locals employed is recovering to levels on par with those existing before the crash. Yet, participation rates are lower than before for both men and women. That implies a population and labor force growth, which the internal population dynamics cannot explain easily. Further, only two age classes in the labor force show gains.
One is the larger class and includes people between 35 and 44 years old. The other has people over 65 years old. Numbers less significant here: a slight increase associated with the general aging profile of the population. All other classes of age shrank. Almost alone, the former is driving the employment numbers up. Such is an outcome mostly unexpected at a time of economic distress.