Economics
Europe’s Wage Subsidies May Not Prevent 9 Million Job Losses
- Allianz economists expect unemployment to rise in some sectors
- Short-work programs might be merely postponing dismissals
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One in five furloughed workers in Europe might lose their jobs despite generous support measures designed to prevent that, according to research by Allianz economists.
Close to a third of Europe’s workforce -- or 45 million jobs in the five largest economies alone -- are benefiting from state support schemes that compensate the lost pay of workers on reduced hours. While these programs are often credited with preventing the sort of short-term mass unemployment seen in the U.S., economists led by Ludovic Subran say about 9 million of them could lose their jobs once support measures run their course.