HOW GLOBAL UNEMPLOYMENT RATES HAVE CHANGED OVER 20 YEARS

Almost a century after the Great Depression rattled the global economy and left some 15 million people unemployed in America, COVID-19 threatens to be the modern equivalent of one of the biggest unemployment triggers in history.

As we’re experiencing what could be the largest global economic crisis of the century, comparethemarket.com.au has investigated data from OECD member countries to look back on some of the world’s biggest unemployment trends in the last 20 years. The top three countries each year with the highest percentage of unemployment compared to their population are investigated from 2000 to 2019 to indicate economic and unemployment trends in the 21st century.

Early 2000s: Start of a new century

• Slovak Republic – 18.8%

• Poland – 16.1%

• Estonia – 14.6%

Russia’s financial crisis in 1997 kick-started a period of economic inactivity and high unemployment, which would continue for the next decade. In 2000, nearly 1 in 5 (18.8%) of Slovak Republic’s population were unemployed.

Poland suffered similar devastating unemployment figures, partly due to the financial crisis which had a detrimental effect on one industry in particular. As many as 42.1% of all Polish unemployment occurred within the agricultural industry, where many lived in rural areas without owning their own farms. Luckily Poland’s numbers began to improve. Temporary employment through contract work led to the creation of 1.7 million jobs between 2002 and 2008.

As for Estonia, the Russian Financial crisis from a few years earlier, combined with the economic slowdown that occurred across 2001 and 2002 led to a period of severe inactivity in the labour market. Estonia’s unemployment rates improved over the coming years.

2006: Era of improvement

• Poland – 13.8%

• Slovak Republic – 13.4%

• Germany – 10.3%

Between 2006 and 2007 both Poland and Slovak Republic showed considerable improvement. Poland’s statistics showed as much as a 4.2% decrease in one calendar year. After appearing in the top three for the first time in 2005 (11.2%), Germany also showed signs of positive recovery despite the Global Financial Crisis (GFC) beginning to grow.

Despite the GFC taking place primarily across 2007/08, there was an improvement in the OECD average unemployment figure (5.96% in 2008) as the world’s economy experienced positive growth. The full effects of the GFC did not hit many countries until a few years later.

2009: GFC repercussions spark a major downturn

• Spain – 17.9%

• Latvia – 17.6%

• Lithuania – 13.8%

Although the GFC began in the United States, foreign banks were involved in the relaxed loan processes from lenders that ultimately led to the major economic downturn. This left a lasting impact on many countries around the world, particularly those in Europe. The ensuing years were tangled up in a major global recession, which brought the OECD average from 5.96% to 8.16% in a single financial year (2008 – 2009).

Spain was one of the first countries to face a quick recession and is yet to claw its way back to the rates it boasted prior to the crisis. The financial and construction industries faced serious strife in Ireland and Spain in particular, the latter primarily due to a surge in house prices.

Latvia showed one of the largest year-on-year unemployment spikes in 2009, with an almost ten per cent leap from the previous year. Their economic crisis was attributed largely to the fall of the easy credit market and an influx of foreign capital, leaving many businesses bankrupt. Lithuania almost mirrored this leap with an 8% increase in unemployment rates from the previous year.

2014: Road to recovery

• Greece – 26.5%

• Spain – 24.4%

• Portugal – 13.9%

Data presented by comparethemarket.com.au

From 2014 onwards, a period of financial recovery occurred which was reflected in the OECD average unemployment rate. Aside from Greece and Spain, every OECD member country that experienced a GFC-inflicted downturn has seen unemployment rates return to a similar level that was seen prior to the crisis.

Unfortunately for Greece, the GFC coincided with their own debt crisis. During the height of their collapse in 2011, Greece’s debt was around one-and-a-half times its GDP. After a rapid decline, they showed the highest unemployment rates within the OCED in the 21st century with over 4 in 10 people between 15 and 29 without work in 2013 – double the rate of adults elsewhere.

In 2018, over 85 per cent of temporary workers in Spain were in such employment because they were unable to find permanent work. Despite this, the economy continued to slowly improve, including the placement of 200,000 new jobs in the first half of the year.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes