- In North America, employment fell sharply in the early stages of the coronavirus (COVID-19) pandemic, while the falls in employment in Europe were far more contained – which demonstrates the relative success of enhanced job retention schemes.
- By Quarter 4 (Oct to Dec) 2021, employment levels had recovered strongly since the start of the coronavirus pandemic in all G7 countries; however, they remain marginally below Quarter 4 2019 levels in all countries except in Canada and France, where employment levels are higher.
- There have also been significant movements into inactivity in the UK, where the coronavirus pandemic has had an impact on those who are actively seeking work and/or who are available to start work.
- Real household disposable incomes fell during 2020 in Europe but increased in North America and Japan, reflecting the impact of direct cash handouts to households.
This article sets out the current positions of labour markets in the G7 countries (Canada, France, Germany, Italy, Japan, the UK and the US), relative to during and before the coronavirus (COVID-19) pandemic. This is as governments scale back the substantial support made to job retention schemes and household incomes during the coronavirus pandemic.
We look at how labour markets have evolved for these countries up to Quarter 4 (Oct to Dec) 2021. At that point, a surge in new coronavirus infections, mainly because of the Delta and Omicron variants, delayed the reopening of economies. This led to an extension of labour market support policies in some countries.
Despite these events, only Germany among the G7 countries reported a decline in real gross domestic product (GDP) during Quarter 4 2021. Figure 1 shows all seven countries, after suffering a severe contraction during the first half of 2020, are now close to or already exceeding pre-coronavirus levels of GDP.
A steady recovery in the economy and labour market through 2022 and beyond continued to be predicted in forecasts by the Organisation of Economic Co-operation and Development (OECD) in December 2021. The forecasts considered data on rapidly increasing infection rates. By the middle of 2022, all of the G7 countries were projected to be above the pre-coronavirus level of GDP. This outlook reflects the effects of COVID-19 vaccine rollouts in advanced countries and changes in business responses, as coronavirus became a more persistent factor.
More recent forecasts by the OECD and the International Monetary Fund’s (IMF) World Economic Outlook April 2022 suggest a slower recovery in 2022. However, this is not a reflection of the coronavirus pandemic, but the impact of the war in Ukraine and the sharp acceleration in consumer prices inflation across the globe. In recent months, governments have rapidly withdrawn coronavirus-related restrictions on economic and social activities. Now, two years on since the start of the coronavirus pandemic, this article takes stock of conditions in labour markets across the G7 countries.Back to table of contents
Employment measures the number of people in paid work or who had a job that they were temporarily away from (for example, because they were on holiday or off sick).
Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks.
People not in the labour force (also known as economically inactive) are not in employment but do not meet the internationally accepted definition of unemployment. Either because they have not been seeking work within the last four weeks and/or they are unable to start work in the next two weeks.
Real household disposable income
Household income after the deduction of taxes and the addition of benefits and adjusted for inflation.Back to table of contents
The impact of the coronavirus (COVID-19) pandemic on the Labour Force Survey
Since Quarter 1 (Jan to Mar) 2020, National Statistics Institutes (NSIs) have faced difficulties in conducting labour market surveys because of restrictions to face-to-face interviews and operating call centres. Those that relied on these approaches have switched to alternative forms of data collection. However, this has also created challenges by lowering response rates and changing the composition of respondents. Data users have been warned that labour market statistics published during the coronavirus (COVID-19) pandemic may be subject to greater uncertainty and lower international comparability than usual.Back to table of contents
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