Reversal of Fortune, data for April 2020 shows US unemployment at 14.7 per cent and European unemployment lower at 6.6 per cent.
European unemployment is now lower than in the US: Before the collapse of the US job market last April, Europe’s unemployment rate was higher than the US.
Europe’s COVID-19 health crisis began earlier than the United States, but it suffered a devastating decline in economic productivity for both regions.
Nevertheless, in this recession, Europe was able to prevent unemployment from getting out of control.
Data for April 2020 shows US unemployment at 14.7 per cent and EU unemployment at 6.6 per cent. The disparity points to the way both governments have approached the challenge.
In Europe, policymakers have used short-term work plans to reduce unemployment. These programs encouraged employers to maintain a portion of employee pay with state subsidies.
In contrast, the United States policy response has mostly focused on payments to big businesses and one-time payments to all citizens.
With less emphasis on subsidizing employee pay, companies quickly pressed the cut button.
At this point, the European approach may have done a better job of supporting their economies through the crisis, even if it has not been seen yet, to prevent a job market crash.