Situation report: lay-offs buffer unemployment growth, financial support for businesses prevents bankruptcies

29.5.2020

Restrictive measures during the coronavirus crisis have contributed to a rise in unemployment. The number of unemployed jobseekers increased by 124,000 from April.

Lay-offs act as buffers to rising unemployment. In April, lay-offs accounted for a greater part of the increase in the number of unemployed jobseekers. As the lay-offs have hit hardest sales personnel and restaurant workers, it is possible that the lifting of restrictive measures will allow a faster economic recovery than in earlier financial crises. The key question is whether the lay-offs are cancelled or whether they lead to longer-term unemployment.

In anticipation of the rise in lay-offs, the number of codetermination notifications and of employees at risk of being laid off reached record numbers in mid-March. In April, the number of new notifications per day decreased rapidly, and the trend stabilised in May. A positive sign is that so far only a few codetermination talks have resulted in redundancies, according to employers’ reports to the Employment and Economic Development Offices (TE Offices).

Youth unemployment has doubled in the last year. The multiprofessional Ohjaamo services report a change in the questions and concerns expressed by young people during the coronavirus situation. Young people are especially concerned about summer jobs, lay-offs, income, loneliness, life management problems and uncertainties related to studies.

Some self-employed persons have registered as unemployed jobseekers under temporary legislation, which entered into force in April, and TE Offices have so far issued 42,000 labour market support statements to Kela.

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Situation report: lay-offs buffer unemployment growth, financial support for businesses prevents bankruptcies (tem.fi)